Published at 11:24, Monday, 05 January 2009

WHO really shut down Woolworths ?

Everything must go: Shop fitters strip bare the former Woolworths store on English Street in Carlisle

The media hype that has surrounded the publicly humiliating way that the High Street giant Woolworth’s was liquidated has put it all down to the credit crunch but in reality the credit crunch played only a small role in it.

Woolworths wasn’t just shut down, it was stripped naked in public and shut in a degrading manner that we in England should not have stood by idly and accepted.

Instead, we took part in it like wild dogs devouring a freshly slaughtered lamb.

For many years now the legend of the High Street Woolworths has been struggling to get shoppers in to spend.

This has been down to the company’s refusal to modernise, bad senior management and poor guidance from the shareholders.

This has meant that Woolworths has haemorrhaged money year on year and when Black Friday happened a result of the credit crunch the company’s shares slid by more than 92 per cent and creditors called in the administrators.

But what a lot of people may not know is that Woolworths might still be in business today.

In November of last year another High Street giant, Iceland, put forward a proposal to save the company and secure the 27000 workforce with a £50m takeover offer. Majority shareholder Ardeshir Naghshineh and a large number of major shareholders felt they weren’t getting a good enough deal, so the offer was withdrawn by Iceland.

Later on, another company, Hilco, put forward a plan to take on Woolworths’ £350m debt to save the company for the purchase of £1. This was also flatly put down by Mr Naghshineh. He felt that the company should be liquidated and the prime sites it possessed sold off to other companies struggling to get a place on the High Street.

However, in many high streets in many towns across England, with the credit crunch in full swing, shops now sit empty, so any chance of the Woolworths stores being snapped up any time soon look slim, although I believe some will.

Hilco and Iceland were not the only contenders for Woolworths’ takeover, Dragons’ Den’s Theo Paphitis and even Woolworths’ former chief executive Sir Geoff Mulcahy and other unnamed companies and investors looked to rescue the company.

I feel Mr Naghshineh and all the other shareholders must take full responsibility for the company’s failings. They decided who got the top jobs and what direction the company went in. It’s a bit like Bruce Ismay taking his seat in a lifeboat of the Titanic after his orders doomed the ill-fated ship.

Mr Naghshineh and the shareholders crippled the company with poor management but still want an assurance that they will get their money back from their investment.

Put simply, Woolworths’ demise over the past 10 years has been down to the very people who want to break it up and sell it off in order to get some return on their investment. Handing it over to another company who might just turn it around and make money from it just wasn’t an option.

This was all about the prime retail locations the company held which in some eyes were worth more than the company its 99-year history, its employees, or its loyal customers.

I say better to let someone else have control even if it means the few losing out than to have the many suffer and the oldest and largest High Street company Woolworths vaporised. But that’s the free market for you and as soon as that’s put to bed and some legislation passed in Parliament to stop this sort of behaviour the better it will be for all of us.

MR MITCHELL

Maryport

Published by http://www.newsandstar.co.uk