Woolies Update

[brassed off brit]

Ok an update with the ongoing woolies saga.. administrators visited my wifes store today, from this friday all stock is to be reduced by 30 to 50%, wife has to go in early tommorrow to reprice.

All but the store managers have had their keys and alarm codes taken, administrator did say they had to raise the 380 million debt by xmas, so as the weeks pass expect further reductions, basically a firesale.

I have told wife this is to ensure that the new owners have a clean sheet...but i'm not so sure.

Looks like her redundancy is up the swanny too...

[mitchbux]

Ok an update with the ongoing woolies saga.. administrators visited my wifes store today, from this friday all stock is to be reduced by 30 to 50%, wife has to go in early tommorrow to reprice.

All but the store managers have had their keys and alarm codes taken, administrator did say they had to raise the 380 million debt by xmas, so as the weeks pass expect further reductions, basically a firesale.

I have told wife this is to ensure that the new owners have a clean sheet...but i'm not so sure.

Looks like her redundancy is up the swanny too...

Blooming brilliant. I need to get some replacement Xmas tree bulbs tomorrow and the place will be crammed. Bet there won't be any cheap Wii's either.

Seriously, that's sh1t. Treat the staff like scum, and don't even pay them off properly.

[SNACR]

Ok an update with the ongoing woolies saga.. administrators visited my wifes store today, from this friday all stock is to be reduced by 30 to 50%, wife has to go in early tommorrow to reprice.

All but the store managers have had their keys and alarm codes taken, administrator did say they had to raise the 380 million debt by xmas, so as the weeks pass expect further reductions, basically a firesale.

I have told wife this is to ensure that the new owners have a clean sheet...but i'm not so sure.

Looks like her redundancy is up the swanny too...

Well I might as well not bother opening my stores this weekend while everyone goes and lines the pockets of Woolies' lenders. Sounds like it's going to be the first mainstream full on firesale. A lot of the stuff that's gone under recently like Select, MK One, Rosebys etc have just carried on trading in administration with very modest discounts. It looks like the banks took the view that in the current market there was little value in the property leases and the stocks on the shelves were their main chance. If Woolies was having to pay upfront for a lot of it there won't be any retention of title issues, they may even get a large chunk back which would have been destined to LLs at the end of Dec. Some suppliers will be able to get their stock back, others won't. A lot of the same suppliers have been hit with the double whammy of Magsons going down in York they were a CTN type wholesaler of toys and stationery that had some fairly big accounts like Co-op, Somerfield and McColls. Many of their customers were small independent newsagents and POs the decline of which was their main problem and also I think a younger generation of the family had embarked on an aggressive acquisition spree.

I'm not surprised they've restricted access things tend to walkies big style in administration, I know of one company where the entire lorry fleet disappeared one night.

I doubt there's any buyer in the wings the fact Dalgleish has been brought in so early suggests the units will simply be marketed vacant possession with the possibly unrealistic expectation of premiums. People are still taking stuff though it sound like The Range are taking on quite a few MFIs. My guess is there will be a lot of keys going back to LLs early next year.

Statutory redundancy payout can be claimed from govt if employer insolvent used to be through tribunal service, not sure if it still is.

[Mr Yogi]

administrator did say they had to raise the 380 million debt by xmas

Looks like her redundancy is up the swanny too...

Woolies owe half a million pounds for every store they have.

I popped into my local branch the other day out of curiosity. No way do they have half a million pound's worth of stock in there - even at full retail price!

In a fire sale they'll be lucky to raise a tenth of that. I imagine the same is true across the country. I think what the administrator actually meant to say was ' We have to raise enough to pay our £30 million fee by Xmas!'

Re: Redundancy.

As Mr Aldi says, statutory redundancy pay is paid by the state via the Insolvency Service in the event of an employer going bust. The administrator/receiver will make all the arrangements as part of his duties.

This does not cover holday pay or pay in leiu of notice, however.

[SNACR]

Woolies owe half a million pounds for every store they have.

I popped into my local branch the other day out of curiosity. No way do they have half a million pound's worth of stock in there - even at full retail price!

In a fire sale they'll be lucky to raise a tenth of that. I imagine the same is true across the country. I think what the administrator actually meant to say was ' We have to raise enough to pay our £30 million fee by Xmas!'

Re: Redundancy.

As Mr Aldi says, statutory redundancy pay is paid by the state via the Insolvency Service in the event of an employer going bust. The administrator/receiver will make all the arrangements as part of his duties.

This does not cover holday pay or pay in leiu of notice, however.

Half a million pounds of stock at retail value for stores the size of Woolies would be very little I would say more (based on knowing what we carry). It would only be 5000 skus with £100 at retail in branch of each. On top of this they have got masses and masses of inventory in RDCs. Realising the best part of £300 million in a fire sale at this time of year should be doable.

[pb3]

Ok an update with the ongoing woolies saga.. administrators visited my wifes store today, from this friday all stock is to be reduced by 30 to 50%, wife has to go in early tommorrow to reprice.

All but the store managers have had their keys and alarm codes taken, administrator did say they had to raise the 380 million debt by xmas, so as the weeks pass expect further reductions, basically a firesale.

I have told wife this is to ensure that the new owners have a clean sheet...but i'm not so sure.

Looks like her redundancy is up the swanny too...

I'm genuine sorry to learn this. Wish you and your wife the very best and i hope it works out. I'm sure GB will at the very least ensure that staff get full redundancy payments.

Any idea whether the reductions will be co-ordinated? If so then I may dust off the tent and camp outside the local mall tonight so that i'll be first into Woolies tomorrow. It's crowded enough already by bargain hunters - near hysteria!

While I was in Woolies the other day a couple of chaps were idling talking ahead of me. I caught this bit of the conversation;

Bloke 1: Things are really bad innit? Woolworth's gone bust. Would would have thought it?

Bloke 2: Aren't they just! I've heard that Harrods are on the brink as well!

[NotMyHouse]

While I was in Woolies the other day a couple of chaps were idling talking ahead of me. I caught this bit of the conversation;

Bloke 1: Things are really bad innit? Woolworth's gone bust. Would would have thought it?

Bloke 2: Aren't they just! I've heard that Harrods are on the brink as well!

That sounds like the caption to a Punch cartoon from the 1930's!

[Bob Loblaw]

Ok an update with the ongoing woolies saga.. administrators visited my wifes store today, from this friday all stock is to be reduced by 30 to 50%, wife has to go in early tommorrow to reprice.

All but the store managers have had their keys and alarm codes taken, administrator did say they had to raise the 380 million debt by xmas, so as the weeks pass expect further reductions, basically a firesale.

I have told wife this is to ensure that the new owners have a clean sheet...but i'm not so sure.

Looks like her redundancy is up the swanny too...

All stock? Including games consoles and games? Cant see that happening

[Nautorius]

OK,

It is the Leases the majority of Buyers want, as quite a few are Prime Retail Space. The administrator is holding out for selling it as an ongoing concern....but I seriously doubt this will happen. The buyer who offers the best deal will cherry pick the best sites to buy and will probably get the name and stock at a huge discount. It will trade as woolies that we know for a while, maybe through the down turn (becoming a big discount brand). Then they will rebuild later..possibly with a more upmarket brand. Lots of major retailers are worried about damaging their own brands by discxounting too much. Perfect oportunity to buy woolies and use it to sell off unwanted stock!

Remember that J Sainsburys created Savacentre in the last downturn to take advantage of the 'discount' market...it ended up being their most profitable sales space per sq ft! Tesco will just want the space......but another retailer may want it??

Cheers

N.

[CviewUK]

Lots of major retailers are worried about damaging their own brands by discxounting too much.

So M&S has yet another one day sale!

[SNACR]

OK,

It is the Leases the majority of Buyers want, as quite a few are Prime Retail Space. The administrator is holding out for selling it as an ongoing concern....but I seriously doubt this will happen. The buyer who offers the best deal will cherry pick the best sites to buy and will probably get the name and stock at a huge discount. It will trade as woolies that we know for a while, maybe through the down turn (becoming a big discount brand). Then they will rebuild later..possibly with a more upmarket brand. Lots of major retailers are worried about damaging their own brands by discxounting too much. Perfect oportunity to buy woolies and use it to sell off unwanted stock!

Remember that J Sainsburys created Savacentre in the last downturn to take advantage of the 'discount' market...it ended up being their most profitable sales space per sq ft! Tesco will just want the space......but another retailer may want it??

Cheers

N.

Are you trade too?

I can't see it being a good idea getting on the hook for a load of Woolies leases, even less at a premium, to job off stock when come next year there'll be so much stuff coming to the market that LLs will be falling over themselves to do soft deals.

[chichi]

So M&S has yet another one day sale!

But that's Debnehams fault for having another 3 day sale. M&S having a sale. john Lewis lowering prices to match competititors prices and argos vouchers extended til sunday.

People are getting frustrated though when they see one day specials on stuff they've already gone and paid for - especially some preorder games which have been reduced in price now prior to release but they're not allowing existing orders to be cancelled so people can take advantage.

[CharlieChuck]

I'd be surprised if no supplier to woolworths hasn't tried to invoke retention of title, (i.e. all stock that woolworths hasn't paid a supplier for in effect belongs to the supplier still and either the administrators have to pay the supplier for the stock or the supplier recollects it). Woolworths have been struggling for months, so it's a given that it owed suppliers a lot of money. I can't imagine woolworths would have enough stock that they have already paid for to be able to firesale it to raise 300mn, and any woolworths haven't paid for the administrators would still have to pay the cost of it to the supplier. I can't see there being enough profit to do both with a 30-50% sale (as well as paying staff and rent).

[SNACR]

I'd be surprised if no supplier to woolworths hasn't tried to invoke retention of title, (i.e. all stock that woolworths hasn't paid a supplier for in effect belongs to the supplier still and either the administrators have to pay the supplier for the stock or the supplier recollects it). Woolworths have been struggling for months, so it's a given that it owed suppliers a lot of money. I can't imagine woolworths would have enough stock that they have already paid for to be able to firesale it to raise 300mn, and any woolworths haven't paid for the administrators would still have to pay the cost of it to the supplier. I can't see there being enough profit to do both with a 30-50% sale (as well as paying staff and rent).

Their stock turn is much greater than 60 days could well be pushing 12 months so a lot of stock has been paid for. On top of that they've been having to pay up front in a lot of cases. Only suppliers who will be trying to collect stock will be those who went uninsured (is actually quite a few). Only stock worth having will be stock in outers still in RDCs. Cost of uplift stock in shops across 800 branches will mean that would be unviable.

No problem with rents they're paid until end Dec. Only major outgoings for administrators is staff and their own fees.

I'm guessing a bit, but I can well imagine Woolies would normally easily clear £100k/week on average across the group in Dec. My smallest branches of only 1000sqft average £15k/week all through Dec. I'd have thought average Woolies branch is knocking on for 10,000sqft. Woolies trade is very much geared towards xmas.

The banks know how much Woolies stuff in their account at xmas, if they didn't think they could recoup a lot of the cash this way they'd have done the deal with Hilco.

Finally, genuine closing down sales are so lucrative you cannot imagine. That's way retailers were always so keen on fake ones until it was cracked down on. You get a herd instinct buying frenzy and typically take at least quadruple normal turnover. It goes so nuts you wonder if you're doing the right thing closing down. We generally try and sell of the fixtures and fittings, price guns etc. People go so mad thinking they're getting a bargain that we've never got less than what we originally paid for the fixtures and fittings. Remember also in non-food Chinese import type product the retailer is still making a good margin even at half price.

[Saving For a Space Ship]

It's just been on bbc's 'ramping lunch' that Dragon dens' vulture Tatoo Dropacockaloss has pulled out of the Woolies deal talks

[CharlieChuck]

Their stock turn is much greater than 60 days could well be pushing 12 months so a lot of stock has been paid for. On top of that they've been having to pay up front in a lot of cases. Only suppliers who will be trying to collect stock will be those who went uninsured (is actually quite a few). Only stock worth having will be stock in outers still in RDCs. Cost of uplift stock in shops across 800 branches will mean that would be unviable.

No problem with rents they're paid until end Dec. Only major outgoings for administrators is staff and their own fees.

I'm guessing a bit, but I can well imagine Woolies would normally easily clear £100k/week on average across the group in Dec. My smallest branches of only 1000sqft average £15k/week all through Dec. I'd have thought average Woolies branch is knocking on for 10,000sqft. Woolies trade is very much geared towards xmas.

The banks know how much Woolies stuff in their account at xmas, if they didn't think they could recoup a lot of the cash this way they'd have done the deal with Hilco.

Finally, genuine closing down sales are so lucrative you cannot imagine. That's way retailers were always so keen on fake ones until it was cracked down on. You get a herd instinct buying frenzy and typically take at least quadruple normal turnover. It goes so nuts you wonder if you're doing the right thing closing down. We generally try and sell of the fixtures and fittings, price guns etc. People go so mad thinking they're getting a bargain that we've never got less than what we originally paid for the fixtures and fittings. Remember also in non-food Chinese import type product the retailer is still making a good margin even at half price.

Interesting stuff, thanks.

To be honest, I thought just in time stock was popular these days, so I assumed most of their stock would be new and unpaid for. From my experience credit insurers are the strictest on retention of title, most insist on an all monies clause in contracts/terms of conditions, so they'll be restricted in their reductions to those prices.

I agree that anything they've held for a long time, old Cd's DVD's games etc, they'll be able to shift at knockdown prices, but i think they'll be a limit to reductions on newer Cd's and games, which is what most people want at xmas.

What kind of margin do you get on chinese toys and tat? I always knew it was large, but I think it's probably very large.

[Nautorius]

Are you trade too?

I can't see it being a good idea getting on the hook for a load of Woolies leases, even less at a premium, to job off stock when come next year there'll be so much stuff coming to the market that LLs will be falling over themselves to do soft deals.

I am Ex-retail, over 10 years...then moved to Media! Now looking to get back into retail as my skill set of restructuring is in need! Talking to most of the majors and they want the space cheaply as if things turn around in under 3 years they will be a major benefit buying it now! Also means they can move there best management through the business to keep them interested and motivated...

[CviewUK]

You get a herd instinct buying frenzy and typically take at least quadruple normal turnover.

MFI in Canterbury had security guards at the door on Sunday only letting people in when folks had left!

[darwin]

This morning partner went into Woolworths on Portobello Road, London.

Big sign in the window:

"up to 50% off"

Nothing in the store reduced by more than 20%, except xmas wrapping paper reduced by 30%.

Total con.

[gavp]

Swansea Woolies was heaving this morning. Every till was open and queues at each one were at least 20 long. But I saw very little for less than 30% off, and most was only 10% or 20% off. They should make a decent profit out of this.