Woolworths sell-off plans fail

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The Independent Online

Fears were growing for thousands of Woolworths jobs today after it was reported that administrators had failed to sell the business.

The historic chain, which has more than 800 stores, collapsed last month after a rescue deal fell through.

Administrators from Deloitte are still in talks with potential buyers, but the Financial Times website said the complexity of the group's leases and difficulty in restocking the business after Christmas had put off interested parties.

The FT said a closing down sale could be held "within days".

Woolworths employs 30,000 staff, with around 25,000 working in retail.



Rival retailers are understood to have agreed to buy hundreds of store leases and some employees could subsequently find jobs with the new owners.

A number of high street retailers have been linked to the potential sale of the group's outlets, many of which have planning permission to sell food, including Tesco, Sainsbury's, Asda and Iceland.

Woolworths' wholesale music, DVD and books distribution business Entertainment UK, which was also placed in administration, was in danger of liquidation as well, according to the FT.

Last week high street retailer Zavvi told online customers that the situation at EUK made it difficult to secure the availability of products.

It is thought the company had ceased delivery to its customers, but Deloitte said "constructive talks" were taking place with suppliers EUK to ensure arrangements to resume business.

Deloitte made around 450 staff at the retailer redundant last week as it tried to find a buyer for part or all of the business.

A massive sale with up to 50 per cent off toys and gifts was also launched, with a pledge that stores would carry on trading beyond Christmas while a rescue deal was sought.

Among those reported to be in talks with Deloitte were Woolworths' former boss Sir Geoff Mulcahy and Ardeshir Naghshineh who, with a 10 per cent stake in the group, was the company's biggest shareholder.

Dragons' Den entrepreneur Theo Paphitis made an unsuccessful bid for part of the chain after it went into administration, but said he could not reach a deal with Deloitte, adding that it was likely a break-up of the business would raise more cash for creditors.

His proposal would have seen the retention of the Woolworths name and acquisition of a large slice of the retail business.

Sir Geoff went on to build retail empire Kingfisher after buying Woolworths in the 1980s.

The administrator was appointed last week after Hilco, the restructuring specialist, failed in its attempt to buy the company's stores for £1 and assume a major share of its £385 million borrowing facility.

Woolworths' 40 per cent stake in 2Entertain media publishing business is not in administration. But it is understood the group is at loggerheads with joint owner BBC Worldwide over the sale of its shareholding.

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