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 |
Abstract Case Intro 1 Case Intro 2 Excerpts
"The impact of the credit crunch and consumer recession were the final blow to Woolworths, but many believe the retailer's fortunes were in fact decided in the run-up to Woolworths' demerger from Kingfisher in August 2001. And opinion is sharply divided about whether the seeds planted then were of failure or success."
- George Macdonald, Reporter for Retail Week, an online retail magazine, on December 04, 2008.
Introduction
On November 27, 2008, the UK-based Woolworths Group Plc (Woolworths) involved in the retailing, entertainment, and publishing businesses declared that its primary businesses - Woolworths Plc (Woolies), its ailing retail chain, and Entertainment UK (EUK), its wholesale entertainment distribution arm, were being sent into administration. The Group's losses had increased significantly to £ 99.7 million for the half year ended August 02, 2008, as compared to £ 63.8 million in the corresponding period in 2007.
Its debt obligations stood at £ 342.5 billion as on August 02, 2008 (Refer to Exhibit I for financial highlights of Woolworths Group Plc between 2001 and 2008, to Exhibit II for interim financial results for the 26 weeks ended August 02, 2008, and to Exhibit III for the Group's net debt obligations as on February 02, 2008, and August 02, 2008). It had rejected offers from a number of buyers including Iceland Foods5 in August 2008 while its bankers rejected a take-over by Hilco UK Limited.
After going into administration, Woolworths failed to achieve a turnaround in December 2008 in its peak sales season. On December 27, 2008, the first set of 200 Woolies stores were closed down with the rest scheduled to close by January 06, 2009. In the process, 25,000 workers from Woolies and another 5000 from the EUK lost their jobs. Woolworths had started its independent operations as a retail and entertainment company in 2001. When it demerged from its parent concern, the Kingfisher Group Plc, in August 2001, it inherited a debt of £ 200 million and costly lease agreements and stock positions...
Buy this case study (Please select any one of the payment options)
| Price: Rs.300 |
Price: Rs.300 | PayPal (7 USD) |
