27/11/2008

Woolworths Worth Saving

There was better news today as crisis-hit Woolworths' administrators have begun efforts to rescue the troubled chain, which has 19 stores in Northern Ireland.

About 200 Woolies' jobs are under threat here, but administrators Deloitte have said the stores will remain open until after Christmas and staff will be paid.

However, medium term job security remains uncertain.

There remains growing concern for the future of furniture retailer MFI which is also to go into administration.

The company employs 30 people at three stores in Northern Ireland and another 30 to fit kitchens and bathrooms.

It is understood staff have been asked to stop taking orders at its stores in Spucefield, Bangor and Newtownabbey.

Woolworths - which has just completed a major store refurbishment at its north Belfast outlet at City North (formerly Yorkgate) - said in a statement yesterday that it was in discussions over the potential sale of its 840 stores - which have clearly now failed.
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London-based Woolworths has stores locally in Banbridge; Londonderry; Enniskillen; Lisburn; Coleraine; Portadown; Armagh; Bangor; Connswater Shopping Centre, East Belfast and the north Belfast store at the former Yorkgate site.

The firm added yesterday that it was also in talks to sell its 40% stake in publisher '2 Entertain' to the BBC Worldwide concern, which already owns the other 60%.

A specialist restructuring firm, Hilco had offered to buy the chain of shops for just £1, but couldn't reach agreement on how much of Woolworth's £385 million debt it would take on.

Shares in Woolworths had fallen by more than 90% over the past year as concerns over its future have risen.

In September, the firm reported a record first-half pre-tax loss of £90.8m and scrapped its dividend to shareholders.

However, just a few months ago, in August, it rejected a takeover bid of £50m for its 815 stores from a group headed by the founder of the Iceland frozen food chain, Malcolm Walker.

In addition to the Woolworths stores and its 40% stake in 2 Entertain, the company runs distribution business Entertainment UK.

(BMcC/KMcA)

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