Saturday, January 10, 2009

Wondering at the Waste of Woolies

The last Woolworths store has now closed, leaving a gaping hole in the high street. I think it caught many people by surprise to realise how much they would miss a shop in to which they rarely ventured.Somehow just knowing there was a Woolworths nearby was weirdly comforting, even if we had mostly switched our allegiances to Wilkinsons, HMV, Peacocks and the supermarkets.

More to the point, was the closure necessary? Offers were made and rejected that would have taken over the whole chain, although presumably some stores would still have closed in that process. But look at the astonishing fees that the administrators pay themselves (£50 million was one figure I saw before Christmas, one article reporting that Deloittes are charging £22,000 per hour). And the banks that lent money to Woolworths not only get all their money as they were secured creditors, but they will get penalty fees on top - legal, but maybe an incentive to hasten the closure rather than look for a trading solution.

Add that to the cost to the economy of the loss of business taxes, the cost of support and benefits for the newly unemployed staff, the costs of those businesses that will now struggle or collapse with the loss of such a major outlet (not to mention the write-offs of their unpaid bills to Woolworths) - add that lot to the best of the offers received when the chain was open, and if the total is higher than the final value realised by selling off the leases piecemeal, then the administrators should be made to pay the difference. It's quite hard to see how it is in their interest to find a quick and tidy solution when they're being paid hundreds of thousands of pounds a day to evaluate, consider and reject offers as all the options evaporate one by one.

Sadly it feels like the people who we imagine were trying to rescue the chain - administrators, banks etc - have their snouts too deep in the trough to even consider anything other than their own winnings. Just my opinion...

Iceland had made an offer for the whole chain in August, rejected as insufficient. So now they are left with cherry-picking 50 or so sites to turn in to their own outlets - Broadstairs, Herne Bay and Whitstable included. But what a wasted opportunity. And Margate, Ramsgate, Canterbury, Faversham and all the others will just have to live with the uncertainty of what will happen to that gap in the high street.

The picture below shows Canterbury's store on its last day. Tragic.
Canterbury Woolworths

This is the full list of the stores bought by Iceland: Alton, Barnsley, Belper, Bethnal Green, Bexhill On Sea, Bicester, Billericay, Blandford Forum, Bodmin, Boreham Wood, Bow, Braintree, Broadstairs, Devizes, Exmouth, Fraserburgh, Frome, Greenford, Hackney, Hailsham, Harold Hill, Haverhill, Herne Bay, Hexham, Highgate, Honiton, Kilburn High Road, Leyton, Malvern, Matlock, Mill Hill, Minehead, Monmouth, Morpeth, Morriston, Newtownards, Palmers Green, Pinner (Rayner's Lane), Palmers Green, Plumstead, Pontypool, Poplar, Portslade, Ringwood, St Neots, Stoke Newington, Strood, Sudbury, Swaffham, Wakefield, Wallington, Whitstable


Anonymous said...

woolies,broadstairs,has been bought by iceland,and no they don't want ramsgate or margate

Anonymous said...

Iceland already has stores in Margate and Ramsgate and i believe Wilkinsons are interested In margate woolies as It has 2 floors and lots of space

ZumiWeb said...

I did also see that Aldi were looking at a lot of new sites around the country - they say they need 30,000 population per store, so some larger towns might get several. Again, East Kent seems reasonably well Aldi'd already so probably doesn't apply locally...