Woolworth chain on the verge of failure
The Woolworth department store chain took a further step toward collapse Tuesday when a Frankfurt court said it had been placed under administration in Germany three months after its last British store shut down.
Woolworth Deutschland, which has been owned since late 2007 by the British investment group Argyll Partners, includes about 330 stores in Germany and Austria.
The first German store opened in 1926, and the group employs 10,700 people in the country and 300 in Austria, a company spokesman told AFP. He declined to say why the company had been placed under administration however.
A court spokesman told AFP the procedure was launched at Woolworth’s request owing to the “threat of a default in payments.”
“We are at a very early stage in this case,” he added.
Woolworth was hurt by a combination of weak Christmas sales, a crucial time for retailers, by a “sharp decline in sales” in the discount sector and by a lack of liquidity, administrator Ottmar Hermann said in a statement.
“In this exceptionally difficult situation, we hope to do everything possible to maintain jobs and conserve as many sites as possible,” he added.
On January 6, the last British Woolworth closed shop, with the group’s collapse in that country leaving 27,000 people out of work. The clothes-to-confectionery retailer has steadily lost market share in the past few years as specialised stores undercut its prices. Argyll had already launched a broad restructuring programme that included the elimination of some 1,000 jobs and the closing of several stores, the administrator noted on Tuesday.
The British fund also sold much of the real estate owned by Woolworth Deutschland to a US peer, Cerberus Capital Partners.
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Woolworth Deutschland, which has been owned since late 2007 by the British investment group Argyll Partners, includes about 330 stores in Germany and Austria.
The first German store opened in 1926, and the group employs 10,700 people in the country and 300 in Austria, a company spokesman told AFP. He declined to say why the company had been placed under administration however.
A court spokesman told AFP the procedure was launched at Woolworth’s request owing to the “threat of a default in payments.”
“We are at a very early stage in this case,” he added.
Woolworth was hurt by a combination of weak Christmas sales, a crucial time for retailers, by a “sharp decline in sales” in the discount sector and by a lack of liquidity, administrator Ottmar Hermann said in a statement.
“In this exceptionally difficult situation, we hope to do everything possible to maintain jobs and conserve as many sites as possible,” he added.
On January 6, the last British Woolworth closed shop, with the group’s collapse in that country leaving 27,000 people out of work. The clothes-to-confectionery retailer has steadily lost market share in the past few years as specialised stores undercut its prices. Argyll had already launched a broad restructuring programme that included the elimination of some 1,000 jobs and the closing of several stores, the administrator noted on Tuesday.
The British fund also sold much of the real estate owned by Woolworth Deutschland to a US peer, Cerberus Capital Partners.
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