No One To Save Woolworths Crisis...even at £1
Woolworths has been locked in crisis talks this weekend with company restructuring specialist Hilco, negotiating a 'rescue takeover deal' to save its 840 high street stores. The starting bid price? £1. The reason? Debts of £385m.
However, Burdale Financial, a subsidiary of the Bank of Ireland, and GMAC Commercial, both lenders to Woolworths, have so far rejected the Hilco offer to offload their debt, striking fear that 30,000 jobs could be at risk with the troubled retailer, currently reporting "operational issues and strategic challenges". The half year reported losses amounted to almost £100M in September.
Unless the M&Ms and Gok Wan DVDs start flying off the shelves, 25,000 staff at Woolies, and another 5,000 for other businesses within the group could be lost. The subsidiaries of Woolies include media distributor EUK who are closely involved with stocking DVDs and CDs at supermarket chains like ASDA, BBC media partner 2entertain, and women's clothing store MK One. It's also the 2nd time this year that MK One has had trouble.
But is throwing money at one of the UK's most well known high street chains going to solve the problem? In my opinion, Woolies needs a serious image rebranding whatever happens.