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Woolworths sets out recovery plan

Nigel Cope,City Editor
Wednesday 11 September 2002 00:00 BST
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Woolworths, the high street retailer, is to end its Woolworths General Store format, revamp its Big W out-of-town branches and invest heavily in improving distribution, stock availability and new product development in the run-up to the key Christmas selling season.</p>It will add 6,000 extra staff at Christmas to cut queue times and open 800 more tills including 300 "handheld" versions, which will enable staff to serve customers in the aisles.</p>Trevor Bish-Jones, who was appointed chief executive earlier this year, said Woolworths would concentrate on improving its core focus areas such as children's and family celebrations, such as birthday parties and Christmas. Peripheral products such as tobacco and food will no longer be sold.</p>Woolworths is even heading more upmarket, with a decision to offer a wider range of prices in areas such as Christmas trees and decorations. It is also attempting to make its business less reliant on Easter and Christmas by offering wider product ranges related to other events such as Halloween and Guy Fawkes night.</p>Mr Bish-Jones said: "When I joined, even people within the organisation didn't know what Woolworths was famous for. Now we have a better understanding and a clear strategy to focus on kids and celebrations, whilst continuing to provide a convenient range of household essentials."</p>As part of the review the 20 General Store outlets will revert to the Woolworths main chain and the 17 pharmacy licences sold off. The 14 Big W stores will be rebranded Woolworth Big W. Revised contracts will be sought with existing suppliers such as Peacocks which provides clothing. A broader range of clothing will be added, possibly from another fashion retailer.</p>At the main Woolworths chain, which has 800 branches, a revised format will be trialed in 30 stores in the run-up to Christmas to focus more on children's clothes, toys, sweets and party goods. The plans were unveiled as Woolworths reported reduced losses, before exceptionals, of £16.6m in the six months to August, compared with £46m a year ago. Like-for-like sales fell 0.3 per cent but improved towards the end of the period.</p>Woolworths added the group was on track to meet its profit and margin targets and will save £5m in costs and £5m in reducing stock theft this year. Further savings have come from 140 job loses at head office.</p>The City reaction was mixed. ING Charterhouse maintained its "sell" recommendation. But Nick Bubb, at SG Securities, was more positive. "We are giving it the benefit of the doubt. It looks oversold." The shares rose 1.75p to 33p. </p>

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