Jump to content
House Price Crash Forum
Sign in to follow this  
munimula

How Much Longer Will Woolworths Last?

Recommended Posts

share price down to a fraction over 5p.

RPT Woolworths' sales and margins worsen UPDATE

AFX

(Repeating to correct typographical error in first paragraph)

LONDON (Thomson Financial) - Woolworths Group Plc, the troubled variety store retailer, reported Tuesday a sharp deterioration in both sales and profit margins at its high street business.

The group also said it has decided to retain 2 entertain, its publishing joint venture with BBC Worldwide.

For the 25 weeks to July 26 sales in Woolworths Retail were down by 3.2 percent and since last updating the market on June 18 like-for-like sales for the six weeks to July 26 have fallen by 6.7 percent.

The retailer said that due to the continued strength of the entertainment market, a larger proportion of sales came from lower margin CDs and DVDs, with a lower proportion from higher margin warm weather outdoor products and clothing.

This, together with additional clearance activity, means that the margin rate in the first half is expected to be approximately 125 basis points below last year.

In the group's Entertainment UK (EUK) and Bertrams business third-party sales for the 25 week period were down 1.0 percent compared with last year.

EUK has renewed its contract to service William Morrison Supermarkets Plc with chart CDs, DVDs and computer games and books until 2011.

The group said the programme to enhance operating efficiency following last year's major changes at EUK continues to 'progress well'.

2 entertain, the group's joint Venture with BBC Worldwide, continued to trade strongly with sales for the 25 weeks up 12.8 percent compared with last year.

Woolworths stressed that having refinanced in January 2008, its four-year Asset Based Lending (ABL) and other facilities continue to provide it with secure, medium term finance which flexes with the seasonal requirements of the businesses.

Shares in Woolworths closed Monday at 6-1/2 pence, valuing the business at just 99 million pounds. This time last year they were changing hands for over 25 pence.

The Unity Investments vehicle, which groups Baugur with fellow Icelandic investor FL Group HF and retail entrepreneur Kevin Stanford, holds a 12.2 percent stake in Woolworths. It has been linked with a possible break-up bid or push for restructuring.

Last month Woolworths' board ousted its chief executive Trevor Bish-Jones who had held the post for six and a half years.

The group said Tuesday the board has undertaken a review of its businesses.

It said the preliminary conclusions, confirmed by a study carried out by a leading firm of strategy consultants, confirms the board's belief that there is a 'considerable opportunity' for the group to build a sustainable value retail proposition based primarily on its small to medium sized stores.

It said the review also highlighted opportunities for improved stock management in the areas of ordering, weeks of stock cover held and availability.

'It is early days but the board has started to put in place the necessary changes which over time will allow the retail business to be more focused on this positioning.'

Further details will be given when Woolworths reports interim results on Sept 17.

On EUK, the board said it remains of the view that this is a strong and profitable business with good growth prospects. In order to further improve the future profitability of EUK, the decision has been taken to mark down and clear a proportion of the business' catalogue stock.

Having carried out a detailed review of its options in relation to its 40 percent holding in 2 entertain, the board has concluded that it would not be right to crystallise value at this time.

'We believe greater value over time will be obtained by retaining our stake in this successful business.'

Share this post


Link to post
Share on other sites

They're either a relic of a bygone era, or in need of a complete makeover/restyle. I can't decide which. We'll always need a high street shop like woolworths, I know the supermarkets do almost everything they do and can afford to subsidise everything to a lower price. But the high street isn't dead yet (maybe so in a few years, but not now) and people of a certain age will carry on buying their kettles, magazines etc in woolworths. To survive long term they either need to go upmarket or downmarket or specialise in something.

I've had a small punt at 5.5p per share, as Barratts have proved over the last few weeks, when they are at this sort of price they can easily go to 10p or 0p, worth a gamble I thought.

Share this post


Link to post
Share on other sites

I popped in there a few times over the last couple of weeks and it's been dead.

The one I visited started out as a BIG W but around 2 years ago it sold/rented half the floor space to another company and reverted to Woolworths.

The summer stuff was being slashed as it clearly wasn't shifting.

Share this post


Link to post
Share on other sites
They're either a relic of a bygone era, or in need of a complete makeover/restyle.

I have been watching the share price drop for years and was a litle puzzled at the city's apparent patience with Bish-Jones as things went from bad to worse. My bemusement is that Wilkinsons, Aldi & Lidl are clearly doing something right, why can't Woolworths manage at least the same?

Edited by Knut

Share this post


Link to post
Share on other sites

Theres a reason the BIG players in the LBO's are going ahead with IPO's, they aint stoopid, burden target company X with massive debts, take a bonus, saddle up & GTF outta town!

Oh and whoever you can drag into your 10 year winning streak via the IPO on your way out....well more the fool them.

Woolies is a dead duck, what can you actually buy there you can buy at Argos/Online etc and those competitors are not saddled with massive debts!

A share price of 5p and not even a take over target?

Edited by Yoss

Share this post


Link to post
Share on other sites

Almost every town used to have a Woolworths but most branches closed yonks ago. If Woolies was going to die it would have done so by now!

Share this post


Link to post
Share on other sites

Can't believe they still haven't figured out what they want to be... they still keep trying to do everything under the sun. They would have been bigger than Wilkinsons now had someone been decisive. They want to be the sweet shop, the music store, the newsagents, the everything.

Where they seem to work best is in small towns like Chepstow - bit of everything where there isn't a toys r us or an argos on the doorstep.

Why not amalgamate it with post offices - 2 pointless places amalgated might produce something quite handy - one stop shop, where you could buy something (incl cards) and then mail it/get it wrapped or just ordered there, wrapped and delivered to someone - after all we all live so far away from friends and family these days?? Could even be like one of those ebay shops where if you don't get e-bay, they do it all for you??

Share this post


Link to post
Share on other sites

Imo I don't think have any idea how to run a busines. What ever I've wanted, every time I go into W, I never manage to get what I want. I fact I come out feeling completly depressed, and that I''ve a wasted some valuble portion of my life. I'm sure Woolworth's is a living myth. One thing, in my branch, the items you need to look at and decide what to buy are behind the pay counter out of range unless you are a sparrow hawk and it's too much of a fuff to ask. There is an abundence of stuff I don't want. I cant even be bothered to scoop up the sweets that you imagine all stickiest kids have chewed and put back. I shall miss the place though, it always looks inviting and I never fail to fall into the trap. In I go- full of expectation -out I come poisoned by disappointmnent- wishing I never had got out of bed that morning.

Trouble IS you might want to invest and when you get there theY will say "Shares What Shares?"

Share this post


Link to post
Share on other sites
I have been watching the share price drop for years and was a litle puzzled at the city's apparent patience with Bish-Jones as things went from bad to worse. My bemusement is that Wilkinsons, Aldi & Lidl are clearly doing something right, why can't Woolworths manage at least the same?

Arguably, Wilkinsons is now in the retail niche that was once Woolworth's, before the latter tried to re-invent themselves as a more up-market store several years back.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 395 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.