Senior director leaves Woolworths as crisis intensifies in run-up to Christmas

A senior director has left Woolworths and others are expected to follow, as the retailer's woes mount ahead of the critical Christmas trading period.

The Independent has learnt that Simon Turner, Woolworths' retail and distribution operations director, departed this week – just over one month after Steve Johnson became the chief executive.

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The management shake-up comes at a crucial time for Woolworths, whose auditors raised questions about "the company's ability to continue as a going concern" in its disappointing interim results statement last month. The UK's biggest retail credit insurers, Euler Hermes, Atradius and Coface, have recently withdrawn insurance cover for suppliers to trade with Woolworths – hindering its efforts to address the gaping gaps in the availability of products on its shelves.

The departure of Mr Turner, who joined the retailer earlier this year, has also raised eyebrows because it comes at a time when Woolworths is under pressure to deliver stock into stores for Christmas. Woolworths' annual profits and sales are highly reliant on the festive trading period.

In September, Mr Johnson said he wanted to simplify Woolworths' management structure to make its retail business more responsive. Mr Turner will not be replaced and it is unclear which other directors will head for the exit.

Mr Johnson, who was previously the chief executive of Focus DIY, the home improvement retailer, vowed to improve on the weak availability of products in "most stores" and said Woolworths had been making far too many basic retailing mistakes. "It is not a strong point in terms of availability," he told The Independent last month.

Mr Turner joined Woolworths from Tesco, where he held a variety of senior posts, including chief operating officer roles in Korea, Hungary and Thailand.

For the 26 weeks to 2 August, Woolworths – which also includes its wholesale entertainment division EUK and the publishing joint venture with the BBC, 2Entertain – posted group sales down 3 per cent to £1.1bn. Its retail like-for-likes sank by 3.2 per cent and its retail gross margin fell by 112 basis points.

This month, Sir Alan Sugar, the star of The Apprentice TV series and the founder of Amstrad computers, acquired a near-4 per cent stake in Woolworths, whose shared have tumbled by more than 80 per cent over the past 12 months.

In August, a consortium led by Malcolm Walker, the chief executive of the frozen food retailer Iceland, and the beleaguered Icelandic investment group Baugur approached Woolworths with an indicative offer for its retail division, but Woolworths said it was "unacceptable" and rejected it. However, it is understood the recent financial crisis at Baugur Group, which has a 10 per cent stake in Woolworths, has ended its current interest in Woolworths. A spokeswoman for Woolworths declined to comment.

Separately, another struggling retailer JJB Sports said yesterday it had received a preliminary approach for its Life Style division, which includes the footwear chains Qube and Original Shoe Company. It is understood that JD Sports Fashion, the sports and fashion retailer, has approached JJB Sports about buying the two chains.