The high street chain’s administrators, Deloitte, have confirmed that the former retail stalwart will close down on 5 January 2009, leaving tens of thousands of workers unemployed.
Holmes says it’s not surprising Deloitte couldn’t find a buyer for Woolies. “Nobody wanted to buy the Woolworths proposition,” he says. “Nobody wanted to buy Woollies and carry on doing what it was doing – they wanted to get the stores and do something different to them.”
Holmes says that’s what the company’s senior management should have done years ago: “The problem isn’t the store portfolio – they’re in suburb locations. The problem has been that Woolworths’ proposition and merchandise offering have not kept pace with consumer demand. It’s been an issue for Woolworths for many years and it’s got worse in the last five years. The trouble with the recession is that it always finds the weakest first.”
The administrators haven’t ruled out an 11th-hour saviour for Woolworths but admit it’s unlikely to happen. Holmes expects the other major food retailers will move into the premises left vacant by the group’s demise: “If you’re Tesco or Morrisons or any other group with permission for food retailing on the high street, why would you want to buy from the administrator when you can just wait for the store to collapse, then knock on the door of the landlord and say ‘I’ll take it over’?”
He continues: “It’s a great shame but Woolies is probably going to be the first of several retailers to go bust. It’s the end of an era, but eras do end.”