Wednesday, 26 November 2008

Woolworths and MFI into administration

Letters from a Tory asked us a few days ago if any company would collapse before Christmas. I thought a few would go into administration in January rather than down shutters and goodbye.
Woolworths was always the most likely to go as regular commentator Houdini replied "I don't know Bill, a few retailers are due to close before Christmas, ..I do see DSG pairing back a few names like PC World, along with maybe JJB, Homebase, Focus at a push, DFS ..

Well predicted Houdini and I replied "JJB sports/JD more likely to merge than collapse for example. But there is always a FarePack around. I guess one of the big furniture/kitchen suppliers {MFI is already at fingertips}"

Mr Sugar appears to have escaped from the disaster of our original story on Woolies as his share acquisition fell through. Lucky lucky man!

So some 35,000 jobs lost if you add in all the delivery contractors and suppliers to MFI, plus all those same suppliers getting 5p in the £ or whatever may well fold up a few more companies. Very bad news for all concerned, and Mr Brown.

And as Woolworths slip into administration the fear for other retailers is that their already heavily discounted, damaged margin, products will not be able to match the genuine 1/2 price stock clearance, "everything must go""final few days" sales that will come from the administrators. Clinton cards shares for example keep falling. 1024 stores, already 7.1% down, 21 store closures since August and about to be hit by the Woolworths "sell it for what you can get" card sale tsunami. Doesn't look good. Add in all the toy companies, kids clothing firms and confectioners, dvd/cd/video game shops who will be hit by a dying competitor at the worst possible time.

For shoppers its great,but it does rather show the pointlessness of 2.5% VAT reduction when if you're not 50% off then you're not even going to be in the game.


Nick Drew said...

bad news for ... Mr Brown

this illustrates well - and promptly - the trap he is in: there will be a ton of bad news from now till whenever, and punters will surely conclude he has shot his bolt to no avail

this ought to be an open goal for, err .. Osborne (hmm, well)

Mandelson's narrative faculty will be working overtime to spin some gloss for this one

Jon said...

Nick - "Mandelson's narrative faculty will be working overtime to spin some gloss for this one"

He will claim that Woolworth's was an unsuitable partner in the anti-obesity drive. Or the dental health crusade. Goodbye to the pick & mix, the paving-slab sized bars of Cadbury's Dairy Milk, the 44 gallon drums of Quality Street ...

Anonymous said...

Analysts forewarned actual unemployment figures by Christmas would be far higher than government's 'user friendly' figure.

hatfield girl said...

I wondered if this isn't the collapse of a life style. Shops like Woolworths sold cheap, standardized goods. So do most supermarkets. They aren't pleasant to go to and the goods they offer are designed to meet and not excel a set of parameters. So why shouldn't they bring their goods to me, when I order them. I'm saved the trouble of entering their store or even their neighbourhood, they make a further profit from the delivery service.

The Christmas markets in, say Berlin or Munich, are full of lovely things and lovely spiced, hot wine. Walking down Regent Street last Saturday I found I had stepped into a taxi and gone home.

Anonymous said...

Not happy to be right in this instance at all, but only partly right, and we still have a few weeks to go.

I hate being a doom and gloom merchant.

I don't think there is a positive spin to be gleaned from this by Mandelson or anyone else, and besides that Mandelson is still seen as a joke with something homo on Brown that saw him brought back to Government and given a peerage.

The only spin going on seriously at the moment is how Mandelson, Brown and the rest are, supposedly, demanding the banks and credit card companies continue to lend at favourable rates for consumers.

The problem is that even the most profligate of consumers know the game is up and borrowing must be curbed, and the banks would lend if they thought it was a good bet and likely to be returned with the interest over however long a period. I personally don't buy into the shite that the banks are hoarding money; the banks know bad bets and are avoiding them, like they should do.

Anonymous said...

.....egent Street last Saturday I found I had stepped into a taxi and gone home....

What you're describing is the new British, establishment, obsession and religion of health and safety. Spiced wine in the street? Ohhh no, might scald someone, or may end up with anti-social binge drinking, and I do have a job to do, and do you have a licence etc. etc.

AntiCitizenOne said...

WHSmiths next?

CityUnslicker said...


Letters From A Tory said...

I won't shed a tear for Woolworths because it was an awful store and has been so for quite a while, but the impact on the economy of a major high street retailer disappearing completely will be felt by everyone.

It will shatter many people's (already fragile) confidence.

Steven_L said...

Changing the subject, there must be an election coming. I've just had my (public sector) payslip and at first I thought they'd overpaid me by about £350.

I got on the blower to payroll and it's 7 months worth of backdated payrises they've been arguing over!

Fiscal stimulus? Or pre-election bribe? (Not that either is going to work on me!)

Bill Quango MP said...

Steven L
good for you..
Now Mr Brown wants you down at Currys getting a new flat screen ASAP because
A]its his favourite stat as its in the inflation basket and
B] They are next on the list to implode.

Anonymous said...

My last trip to Woollies - urchin removes sweet from pick'n'mix, stuffs in gob. Rictus of displeasure; puts sweet back, dripping slavers. I groan. His Mum looks at me and announces "Boys will be boys".

Anonymous said...

So, in terms of the economy, hwo big a deal is it?

If those 2 go over, 31,000 jobs will be lost? Then surely suppliers and suppliers of suppliers and people along the chain will lose their jobs in a dangerous downward spiral?

Or have I got this one all wrong?

JPT said...

I think that we've entered an economic tailspin.

Steven_L said...

Curry's? You must be mad, have you seen the discounts on TV's at Tesco? I bought mine a couple of months ago for over £160 and I thought that was a good deal, it's down to £120 now!

Last time I saw a major change to a council payslip was April 2005. Not only was the gross bumped up a notch or two they lifted the student loans repayment threshold by £5k.

I sense he's thinking about moving in for the kill you know. These are dangerous times.

hatfield girl said...

'These are dangerous times'

Certainly are when the Opposition front bench is having members arrested under the anti terrorism acts. And their parliamentary offices entered and searched by the police.

Bill Quango MP said...

Have a look at HG's Pantomime horse story on the government claiming credit for saving Woolworths staffs jobs for Christmas.

Set phasors to spin Captain Kirkaldy

Anonymous said...

The snotgobbler has finally flipped. He's now getting the plods to lock up his opponents. Is it me, or did we just turn the clock back to 1640? I don't remember the Met Gestapo being this enthusiastic about chasing Tony Bliar & his friends over cash for honours. Did we not just witness the government leaking its PBR (market sensitive stuff) ahead of time? WTF is going on in this country???

Anonymous said...

Well to be fair, both Woollies and MFI have been rubbish for years.
I would have thought that most of their customers were on benefits and so their demise has come about because those folks have finally had their credit denied ( quite right too ).

Bill Quango MP said...

Some Bloke..
They have been in trouble for years, but the lesson is credit and availability of lending. If the wheels stop turning many more retailers will follow, as will any company that has to buy stock a year or 1/2 year in advance and pay for very steep rents in advance too.

MFI i wouldn't have thought that anyone on benefits could have afforded their prices!
I spent a large sum with them and had one of the worst customer services experiences ever.

Lots of sobs for Woolworths yet I have yet to hear a good word about MFI.

Here at C@W we thought that the management buyout from a previous administration was very, shall we say, unwise.

Anonymous said...

Thanks Bill, I take your point but, a working chap of limited means was moaning to me the other day because his bank had refused him another loan.
Seems he has not yet paid off his last one.
" but that was for ME 'OLIDAY, f'KINELL ! " as though it was his human right for the bank to fund it.

From what I gathered he is up to date with payments on his current modest loan and the bank will lend him further but not until the current one is paid off and that is what I meant by ' quite right too '.
Perhaps if Mr Limited Means were to forgoe his next budget sunsexnsangria holiday he may be able to borrow enough for a bigger plasma TV and thus save Britains High Street ( and do his bit to save the planet too ).

On a personal note I would like to complain about the utter lack of parking spaces at my local Hyper-Tesco today and for the past two weeks; Gordon would ejaculate if he saw the car park queues as the local rustics flock into my city to spend their hard earned benefits on tat in time for Christmas.
" It'll all be over in four weeks, Kuh ! "

Anonymous said...

MFI, part of which went into administration in September, said the remaining 111 stores rescued in a management buyout would follow suit, raising questions over roughly 1,200 jobs. Woolworths, one of Britain's best-known retailers, also decided at a board meeting late on Wednesday to appoint Deloitte as administrator to its 815 stores and its EUK distribution business, a source familiar with the matter told Reuters.

administration jobs

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