RETAIL
RESPONDING to Mary Clarke after an article entitled, “Retail has moved on“, appeared on the website of the Guardian Newspaper, dated Friday 28 November 2008.
Mary writes:
… “Be honest: will you really miss Woolworths? The high street is going to have to adapt to survive this downturn”
WOOLWORTH’S
From the desk of MD
Woolworth’s is a store that most people can relate too because of its magnetic pull from all income earners. Its range of products are wide ranging – from pick n’ mix sweets and children’s clothes to kitchen utensils – and, its demise, is a sad endorsement of the times we now face. Woolworth’s is a victim of the credit crunch and the volatile nature of prices that has affected Woolworth’s stock, enormously. The banks haven’t helped, either, preferring to call on its loans outstanding rather than propping-up a very British organisation. Yet, if liquidators don’t find suitable buyers for the Woolworth’s stores, some 30,000 people from this store alone will either be unemployed or seeking work elsewhere, difficult given current economic uncertainty.
Strategically, though, it is perhaps worth mentioning where Woolworth’s directly fell from the line of competiveness. Now, we see and witness the enormous rise in internet and online sales which has and is having an enormous impact on high street stores. Online shopping affords greater savings and, as such, the profitability of chain and retail stores is being hit. Woolworths has fell victim, but there are bound to be many more stores and businesses due to file for insolvency in the near future.
It is notable from business reports that one of Woolworth’s failings was its failure not to invest more heavily within modern day computerised systems, such as better stock control systems. In the long-run, of course, faster and more efficient company systems invoke greater efficiency driving down costs and pushing-up productivity. It is a lesson for others.
I agree with George Osbourne MP, Shadow Chancellor, who says that Bankruptcy laws in the UK should make a similar provision like that of Chapter 11 which applies in the United States. Chapter 11 grants companies more breathing space when they find themselves in financial difficulty, rather than the almost immediate process of asset stripping which happens under UK Insolvency Laws.
© Mark Dowe 2008: all rights protected
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Filed under: Economic, Financial Markets, Retail | Tagged: asset stripping, Banking, bankruptcy law, chapter 11, company law, computerised systems, cost savings, credit crisis, credit crunch, Economic, economic recession, Financial Markets, george osbourne, high street shopping, insolvency, internet and online sales, long run costs, profitability, woolworths
