Mulcahy digs in at Woolworths
Tuesday 25 July 1995
Sir Geoff has been under pressure to offer some radical suggestions for both Woolworths and Comet after Kingfisher announced its first profits decline in its 13-year history in January. Comet reported a pounds 2m loss while profits at Woolworths fell by a third to pounds 51m.
Sir Geoff said: "We have sold stores before to people like Marks & Spencer, BhS and Burton, but selling chunks of stores would affect the economics of the group." He added that only half a dozen branches of Woolworths were loss-making.
Analysts do not see the economic benefit of retaining loss makers when supermarket groups such as Tesco have expressed interest in acquiring high street sites.
Sir Geoff has spent the last week talking to City analysts and institutional investors about his new strategy for Woolworths. The "seminars" are part of Kingfisher's new approach to investor relations intended to communicate more fully with the investment community. Seminars on Superdrug and the electricals businesses, Comet and Darty, are planned later this year.
However, many retail analysts declared themselves underwhelmed by Sir Geoff's plans to put the wonder back into Woolies. Hilary Monk of Verdict Research said: "There was nothing desperately new." Emma Burdett of Hoare Govett said the plans were logical but added that management had really only "bought themselves some time."
The grand plan for Woolworths is:
rTo return Wolworths to a value-for-money format after last year's mistakes when prices became uncompetitive.
rTo target young mothers on a budget as its core customers.
rTo segment the chain into three types depending on location and adapt the product ranges accordingly. The three groups are heartland stores in market towns where Woolworths is the largest shop; local shops in suburban areas; and city centres where the shops are against competition from rivals like Marks & Spencer and BhS.
rTo concentrate product ranges on the home and family.
Sir Geoff, who was demoted from chairman to chief executive as part of wholesale board and management changes earlier this year, defended the strategy.
"The real issues last year were operational rather than strategic. Woolworths lost its price competitiveness and suffered from stock availability problems," he said.
He added that progress in the first quarter, which showed that sales were ahead, proved that the strategy was on the right lines.
Investment Column, page 18
- 1 Rihanna 'nude photos' claims emerge on 4Chan as hacking scandal continues
- 2 Frank Lampard equalises for Manchester City against Chelsea: how Twitter reacted
- 3 Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
- 4 Free U2 album: How the most generous giveaway in music history turned PR disaster
- 5 Britain First picture: Photographer 'horrified' after first Afghan policewoman killed by Taliban used for 'ban the burka' campaign
Rihanna 'nude photos' claims emerge on 4Chan as hacking scandal continues
Kim Kardashian 'nude photos' leaked on 4chan weeks after Jennifer Lawrence scandal
Jennifer Lawrence leaked 4Chan sex video branded 'fake' by forum users
Gabrielle Union contacts FBI over nude 4Chan pictures leaked by 'vultures'
Jennifer Lawrence 'naked sex video' will be leaked next, threatens 4Chan celebrity photo hacker
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...