Restructuring Woolworths Group Plc. - The Attempt that Failed


Restructuring Woolworths Group Plc. - The Attempt that Failed
Case Code: BSTR323
Case Length: 19 Pages
Period: 2001-2008
Pub Date: 2009
Teaching Note: Not Available
 Price: Rs.300
Organization: Woolworths Group Plc.
Industry: Retail
Countries: UK
Themes: Restructuring, Turnaround Strategies
Restructuring Woolworths Group Plc. - The Attempt that Failed
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

Woolworths Group Plc. (Woolworths) was a 99 year old multispecialty retailer and wholesale distributor of entertainment products chain in the UK. Woolworths had two broad lines of business - a retail arm Woolies and wholesale distribution of entertainment products. Since the year 2001, Woolworths operated in a highly competitive retail environment alongside supermarket chains. Faced with high debt of £ 350 million and slowdown in retail industry in the UK, Woolies and Entertainment UK, Woolworths' wholesale entertainment distribution arm, were forced to file for administration on November 27, 2008. The appointed administrators were unable to revive Woolies even in its peak Christmas season and were also unable to bring about conclusive deals to sell off Woolies as a going concern.

Ultimately, Woolworths had to close down all Woolies stores in a phased manner by January 06, 2009. After the closure, the name Woolies was planned to be relaunched based entirely on an online mail-order retailing and delivery format by summer of 2009. This case study examines the problems experienced by Woolies and debates whether its retail and entertainment chains could have been saved and revived.

Issues

The case is structured to achieve the following teaching objectives

  • Understand the importance of changes in the economic environment on the sustainability of an organization
  • Analyze the risks involved in using long term financing sources to fund working capital requirements and its effects on debt and solvency of the business
  • Assess the impact of the global, economic and local market environments on exposing the inherent weaknesses of an organization
  • Analyze the strengths and weaknesses of a retail organization

Contents

Keywords

Woolworths Group Plc, Woolies, Credit Crunch, Woolworths' Demerger from Kingfisher, Administration, Kingfisher Group Plc, Restructuring, Leverage, Debt Management, Operations Management, Insolvency, Supply Chain Restructuring, Business Simplification Strategy, Entertainment UK, Cost Control, Global Financial Crisis, Financial Statements of Woolworths Plc, Job Losses, Financial Closure

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