|Woolworths Group plc|
|Predecessor:||F W Woolworth & Co. Ltd|
|Successor:||Woolworths Online store|
|Foundation:||Liverpool, Merseyside, England (1909) (opening of F.W. Woolworth's first British store) |
2001 (as Woolworths Group)
|Founder:||Franklin Winfield Woolworth|
|Location City:||Marylebone Road, London|
|Locations:||819 (Peak on April 2008)|
|Area Served:||UK and Ireland|
|Key People:||Richard North, Chairman|
Steve Johnson, CEO
|Industry:||Retail and distribution|
|Revenue:||£2,969,600,000 (2008) |
|Net Income:||£7,500,000 (2008)|
|Num Employees:||27,000 (approx. retail in 2008) |
|Divisions:||Woolworths plc, EUK Ltd. (Both in administration)|
|Subsid:||2 Entertain (40%)|
Woolworths Group plc is a British group which owned the high-street retail chain, Woolworths, as well as other brands such as the entertainment distributor Entertainment UK and book and resource distributor Bertram Books. The 800-branch Woolworths chain was the main enterprise of the group, selling many goods and having its own LadyBird children's clothing ranges, Chad Valley toys and the WorthIt! value ranges. The chain was the UK's leading supplier of Candyking "pick 'n' mix" sweets. It was also sometimes referred to as "Woolies" by the UK media and the general public. 
On 26 November 2008, the trading of shares in Woolworths Group plc was suspended and the Woolworths and Entertainment UK subsidiaries entered administration. Woolworths Group plc also entered administration on 27 January 2009. The administrators Deloitte & Touche closed all 807 Woolworths stores between 27 December 2008 and 6 January 2009 resulting in 27,000 job losses.
The English branch of the originally Pennsylvania-founded Woolworths stores,  F W Woolworth & Co, Ltd was founded by Frank Woolworth in Liverpool, England in 1909 primarily due to Frank Woolworth's ancestry linking to Wooley, Cambridgeshire — Frank himself claiming he had traced his ancestry through the Founding Fathers of the district to a small farm in middle-England. When Frank eventually travelled to England in 1890, he docked in Liverpool and travelled by train to Stoke on Trent for the purchase of china and glassware for Woolworth's ranges, but also noted his love of England in his diary and his aspirations for bringing the Woolworth name to England;
When at a Stoke on Trent railway station, Frank Woolworth met a young freight clerk, William Lawrence Stephenson who impressed Woolworth with this "can-do attitude" and was invited several years later at the time of conception for the British "F. W. Woolworth & Co. Ltd", to meet with Frank Woolworth again, who dispatched a carriage and invitation to his hotel room in London. When Stephenson arrived to meet with Woolworth, he was offered the job as director of the new company, which he accepted.
After the idea for the creation of British stores, Frank Woolworth had offered invitations to store managers in the United States to open up stores in the UK and had only received offers to take positions at the time of his illness in March 1909 from Fred Woolworth of the Sixth Avenue and Samuel Balfour of the 14th Street stores in New York City. After these initial offers, Byron Miller, a superintendent in a Boston store, also offered his assistance and set sail with the other volunteers on the Steamer, Kaiserin Auguste Victoria on 29 May 1909 for England from Hoboken.
Although Frank Woolworth himself expected other members of staff to admire the volunteers in establishing FW Woolworth & Co in Britain, vice president and general manager of FW Woolworth & Co, Carson C. Peck had reservations with enlisting staff members to travel to Britain, questioning whether Woolworth had indeed created the new business adventure following a dream, or due to his dissatisfaction with the current condition of the American branch.
Peck also asked those who were willing to volunteer to reconsider their decision, claiming that those who had volunteered were unaware of the uncertainty and risks involved and that some were only tentatively willing to engage in Woolworth's new endeavour: His concerns mainly entered on the fact that the majority of the managers who followed the decision did so out of loyalty to Woolworth , and that moving such a valuable resource already established in the United States to what was a financially-unproven "Little Infant" in the UK would have a detrimental effect upon the "Bread and Butter" of the Company.
Despite reservations such as Peck's, the decision to launch stores in the United Kingdom went ahead as previously planned by Woolworth. He considered several locations for the first stores, together with future possible sites. The chosen locations for the first stores were 25 - 25A, Church Street and 8, Williamson Street Liverpool – the reasoning being that Liverpool was claimed to be the "second city of the [British] empire". The very first UK store, at Church Street, opened with a performance by a full orchestra, circus acts and fireworks.
As a means of adherence to American trading tradition, only viewing of items was allowed on the first day of the shop's opening. This included guests being given complimentary tea while being entertained by a traditional brass band in the refreshment room. The event was reported positively by the local newspaper, the Liverpool Courier, which praised the decor of the stores along with the value and range of items on sale.
Despite local press praise, the British national newspaper The Daily Mail likened Frank Woolworth to Phineas Taylor Barnum and claimed that the store positions were decided as part of a contingency plan in the event of failure so as to facilitate escape from any financial liability. Despite these reservations, the stores proved to be a success; large queues outside both shops and low priced 3d (1.25p) and 6d (2.5p) items leading to stores being almost stripped bare of goods before the end of the first day of trading and being attributed to mass purchased mass-produced foreign and local goods.
At the onset of World War I, FW Woolworth & Co. had 40 stores located both in Great Britain and in Ireland located in most major cities - from which a total of 57 staff including store managers had enlisted; the majority of whom did not return after the end of the war in 1918. Despite American staff again offering their services to the Woolworths branches in Britain, remaining staff increased their efforts to cope with the lack of staff members throughout the war with several staff members being promoted to managerial positions.
Stores in the United States, which were then stocking ranges also present in British stores were dependent upon European manufacturers which had adopted newer production methods than their American counterparts.
In 1982, the British Woolworths was acquired by Paternoster Stores Ltd, the forerunner of Kingfisher plc. Woolworths Group plc was formed by the demerger of Kingfisher's general merchandise business, and began trading as a listed company on the London Stock Exchange on 28 August 2001, using the symbol WLW.
During the 1980s, management rationalised merchandise lines into clearly defined categories: entertainment, home, kids (toys and clothing) and confectionery. During this time many Woolworths branches were downsized. Older branches in major cities were sometimes almost as large as the major department stores nearby. For instance in 1987, Woolworths left their five floor branch on Briggate in Leeds which they had occupied since 1913 (now occupied by House of Fraser) and kept only their smaller single level branch in the Merrion Centre in an area of the city centre which generally saw a lesser footfall, of shoppers who were generally on a lower budget.
In the late 1990s, the management extended the Woolworths brand into other retail formats and alternative channels to accelerate growth by taking advantage of changing retail trends. Some larger format stores were opened under the Big W brand, similar to Wal-Mart in the US. Although initially successful, the format ultimately failed to catch on; the original plan had relied upon leveraging the involvement of other Kingfisher group retailers, but following the demerger this was no longer possible. In 2004, Woolworths sold off some Big W store sites to other retailers, including ASDA and Tesco. The gross internal floor area of the remaining sites was reduced to an optimum trading size of around 40,000 to 50000square feet. Following this, they were rebranded as Woolworths Out of Town stores.
Woolworths had previously tried the large out of town store or hypermarket format in the 1960s with the Woolco stores. All of these stores were sold or closed down following the acquisition of the business by Kingfisher.
Woolworths had some stores in the Republic of Ireland which were closed in the early 1980s. They were based in large towns and cites in the state. In August 1996, market research was undertaken by Woolworths' Belfast District Office, which investigated opportunities to re-enter the Republic of Ireland market. In a project commissioned by the then Northern Ireland District Manager Bruce Strang, a total of 32 potential locations were identified that could support a Woolworths store. However, the project did not proceed beyond the market research phase.
The newly independent Woolworths faced severe competitive and financial pressures. The market for physical copies of music, one of Woolworths main money spinners, collapsed in the early 21st century - most of the UK's specialist music chains went bust. The major supermarket chains expanded into many of Woolworths product areas, and fast expanding Wilkinson challenged it directly on the high street.
In Summer 2006 the business launched an in-store collection service for items ordered on their website or in-store, to complement the already established in-store ordering system. In late September 2006, the "Big Red Book" was launched. This was designed to be a direct competitor of the Argos catalogue. Big Red Books 2 and 3 followed in March and October 2007 respectively.
In the years before 2008 the brand had moved into the entertainment and electronics aspects of retail after its acquisition of the company Entertainment UK, and expanded its chains by converting existing stores into larger "20x20" stores found in larger high-street locations for larger product ranges and smaller "10x10" stores aimed at meeting everyday shopping requirements. "Out-of-town" stores, formerly known as "Big W" were set up further away from towns and stocked the standard Woolworth lines and other items that are not offered in high-street locations. , there were 819 stores in the United Kingdom.
On 12 August 2008, Woolworths Group announced the appointment of Steve Johnson, former Chief executive officer of Focus DIY, to the post of Woolworths Chief Executive. He replaced Trevor Bish Jones, who had left during the summer.
In September 2008 Woolworths scrapped its interim dividend after it announced a pre-tax loss of £99.7m for the six months to 2 August. Also in September, Steve Johnson, chief executive, outlined a possible turnaround plan to sell 120 stores, axe a quarter of its products, reduce web operations and cut jobs. During the same month The Telegraph noted that Woolworths' chairman, Richard North, had rejected an indicative offer tabled by Iceland founder Malcolm Walker to buy the group's 815 stores.
At that time the retailer's largest shareholder was Iranian property developer Ardeshir Naghshineh, with a 10.2% stake. A consortium led by Icelandic investor Baugur, called Unity owned a 10% stake in Woolworths. In October 2008 Sir Alan Sugar, founder of electronics firm Amstrad, increased his stake in Woolworths to around 4%. Theo Paphitis, owner of stationery retailer Ryman, also stated his interest in the company.
On 19 November 2008 The Times reported that the Woolworths' retail business was a target for restructuring specialist Hilco, who would buy the retail arm for a nominal £1; this was confirmed the same day. This deal would have left Woolworths Group with its profitable distribution and publishing businesses and a reduced debt load.
The group's banks, GMAC and Burdale, rejected the deal and recalled their loans, forcing the group to place the retail business and Entertainment UK into administration. On 26 November 2008, the trading of shares in Woolworths Group plc was suspended. Neville Kahn, Dan Butters and Nick Dargan of Deloitte LLP were appointed joint administrators.  When the company entered administration it had a debt of £385 million. The administrators announced that they were aiming to keep the company as a going concern over the crucial Christmas period, although analysts feared that any heavy discounting would create a domino effect and drag down other high street retailers. Deloitte later announced they had received "substantial interest" in Woolworths.
When news about Woolworths being placed into administration became widely publicised, National Lottery operator Camelot Group immediately suspended Woolworths from selling their lottery tickets and scratch cards, as well as preventing claimants from redeeming prizes at the stores.
On 19 January 2009 the parent company, Woolworths Group, announced its intention to also enter administration, as it can no longer pay its debts. The application was heard by the High Court on 27 January, and Woolworths Group plc entered administration.
On 5 December Woolworths both recorded their greatest single day takings of £27 million, and axed 450 head office and support staff jobs.  A closing-down sale started on 11 December
On 17 December 2008 administrators announced that all 807 Woolworths stores would close by 5 January 2009 (later changed to 6 January), with 27,000 job losses. Deloitte's Neville Kahn also said that it was unclear how much of Woolworths' debt would be paid. In the last few days of trading discounts of up to 90% were offered, and a number of stores sold all of their stock, many selling all of their fixtures and fittings too.  A buyer for the business is still sought.
The former chief executive of Kingfisher, Woolworths' former parent company, and Ardeshir Naghshineh, a current shareholder of Woolworths, have criticized the closures.
The stores were closed in phases, and the final two closing days were moved back a day to try to sell more of the remaining stock and to ease logistics of closing.
The administrators announced on 10 December 2008 that they were having difficulty selling the company as a going concern, and as a result some stores might close before the end of the month. Talks were still progressing to sell individual stores and leases to a number of retailers, said to include the supermarket chains Morrisons, Tesco, Asda, Sainsbury's, The Co-operative and the discount chain Poundland.
In December 2008 Woolworths executive Tony Page was trying to raise around £40 million to relaunch the brand after closure.  This would have been a smaller chain of 125 stores in the North of England, with hopes of returning to the South. However, a deal could not be met in time. The government were also asked in a final attempt to make the deal but without success.
51 of the stores were bought by the supermarket chain Iceland on 9 January 2009 for an undisclosed sum. Iceland had previously made a bid for Woolworths in 2008, but this initial bid was rejected. Baugur, one of the major shareholders of Woolworths, partly owns Iceland, and Baugur UK itself entered administration in February. Some former Woolworths stores have been sporadically replaced by stores such as H&M, Primark, and B&M Retail Limited. As of 2 February the administrators are still negotiating the sale of the remaining sites of the Woolworths property portfolio.
According to press reports on 17 February 2009, the plan by Tony Page to re-open a chain of shops adopting the Woolworths business model but under a different name, are due to go ahead with an initial 50 shops planned.
See main article: Woolworths.co.uk. On 2 February 2009 it was announced that Woolworths is to be "re-born" as an online store, after the brand was bought by one of the companies belonging to The Daily Telegraph owners, Sir David and Sir Frederick Barclay. The Woolworths and Ladybird brand names were both bought by Shop Direct Group who also own companies such as Littlewoods, Kays and Great Universal. The website will use the same URL as the previous Woolworths Group retail website, Woolworths.co.uk.
Many branches of Woolworths suffered severe bomb damage and even destruction during the Luftwaffe attacks in the early part of the Second World War. However it was towards the end of the war that the largest civilian loss of life due to direct enemy fire in Britain during the conflict occurred when, at lunchtime on 26 November 1944, a German V-2 rocket fell on a packed Woolworths store in New Cross Road, killing 168 people (including 15 children), injuring 122 others and razing the building to the ground. The neighbouring London Co-operative Society store was also demolished in the attack.
The store was especially busy as news of a delivery of hard-to-obtain saucepans generated huge crowds, many of whom were queueing outside the store at the time of the rocket's impact.
Planning and economic restrictions after the war meant Woolworths did not build a replacement store on the site until 1960; this closed in 1984. It was reported that some employees there felt the building was haunted.
Lewisham Council and Woolworths erected a plaque on the site commemorating those who died that day.
A serious fire erupted just after 1pm on 8 May 1979 at the Manchester store opposite Piccadilly Gardens, said at the time to be the largest Woolworths in Europe, with six floors plus two basement levels. The fire, which started in the second floor furnishing department, killed nine shoppers and one member of staff; three of them were found just six feet away from an exit and another three bodies not far away. Of the 12 calls made to the fire service that day, none came from the store itself. It is believed that the fire was started by a damaged electrical cable, which had furniture stacked in front of it. An inquiry showed that, although the store's fire precautions met all legal requirements, the spread of the fire and the high number of casualties were in part due to the absence of measures such as a sprinkler system to stop the spread of the fire from the furniture department, and the use of polyurethane foam in the furnishings, a material which is highly-inflammable and highly toxic but cheap and at that time legal in furniture; however, this would have consequences for later legislation.
The second floor was gutted by the fire, while the third floor suffered severe smoke damage; the ground, first and second floors all received extensive water damage when the fire was extinguished. Due to the loss of life and devastation to the Manchester store, the Fire Research Station conducted a number of tests to develop sprinkler systems that could handle a similar large department store fire. However, there is still no requirement for United Kingdom retailers to have a sprinkler system in place, with many preferring to focus on evacuation procedures rather than fire containment. The catastrophe also resulted in modifications to the Fire Precautions Act and was among the factors that led to the ban on the use of polyurethane foam in home furnishings (a long-time concern of the Fire Service) forcing furniture manufacturers to develop new fabrics and materials for sofas and other items.
The fire brought graphic images into the public consciousness (including footage of office girls trapped behind barred windows on the top floor) due to the store's location near the studios of BBC Manchester and Granada Television, the offices of the Manchester Evening News and the northern offices of several national newspapers.
The disaster has become a significant object of study for academics interested in the behaviour of people in emergency situations, after research showed a number of customers (predominately in the public restaurant area) refused to leave despite the sounding of alarms, requests from staff and even the smell and visibility of smoke; some continued to queue at an abandoned check-out. The majority of those who perished were in this area.
Woolworths did not re-open a store in the building, and it is presently a nightclub upstairs and an amusement arcade downstairs. The company has not had a major store in the centre of Manchester since the fire, although the firm did have several smaller outlets during the 1990s which sold music and confectionery. Smaller outlets with a similar format were also tried at the Sheffield Meadowhall Shopping Centre (which closed in 2003), but did not survive for long; the Manchester Music and Video store was superseded by a larger MVC store, owned by Woolworths Group.
Woolworths original branch on Briggate in Leeds which opened in 1913 was one of the chains flagship shops and was spread over four floors. The branch however suffered a major fire in 1969. Significant damage was caused to the shop which was refitted following the fire. The shop was not open to the public at the time and all staff were evacuated, avoiding fatalities. Only minor injuries were suffered. It took several hours for the fire to be extinguished. 
Woolworths’ store at 18/22 Main Street Bangor, County Down, Northern Ireland (Store No. 380) was targeted by terrorists on 30 March 1974 as part of co-ordinated incendiary bomb attack on the town centre.
At 5pm, a telephone warning was received that fifteen incendiary devices had been placed in the town centre and were due to explode in 30 minutes. Immediate and successful efforts were made by the Police to evacuate the commercial centre of the town, however there was inadequate time to prevent the devices from exploding. The Woolworths store was badly damaged after a device exploded on the salesfloor. A Policeman suffered concussion after he was blown off his feet by the resultant blast from the device and a female civilian was cut by flying debris.
Other stores targeted in the attack included the town’s Co-operative Department Store and FA Wellworth Department Store. The town’s Woolworths’ store was demolished after the attack. A new 8,000 square feet store was built on the same site, which reopened in the mid 1970s.
The rebuilt store suffered minor damage after a 200lb car bomb exploded a short distance away, near the town’s FA Wellworth’s store on the evening of 21 October 1992. Nobody was injured in the explosion, which occurred after most stores in the town centre had closed for the day. However, significant damage was caused to the entrance area of the Woolworths' store, with windows being blown out, the porch roof being destroyed and a small quantity of stock toward the front of the store being damaged. Additionally, minor structural damage was caused to the store's stockroom with two internal portioning walls adjacent to the Generator Room and Fixtures' Store having to be rebuilt. The store recommenced trading on 23 October 1992.
Woolworths, for many years, was a leader in the UK music industry. In the 1950s and well into the 1960s, Woolworths issued recordings available only via their stores on their own label Embassy Records, produced and manufactured by Oriole Records. These releases were double-sided singles featuring two cover versions of current hit singles sold at a much cheaper price. This venture was very successful at the time, but was eventually killed off when other record companies started to issue compilation albums. However, Woolworths remained in the music business selling a wide range of singles and albums, and remained the UK's Number 1 music retailer well into the 1990s. Even successful nationwide music specialists stores such as Virgin Megastore and HMV did not overtake Woolworths during this time. They later suffered from strong competition in this field from the large supermarket chains Tesco and Asda.
See main article: EUK. Entertainment UK (EUK) was founded, originally as Record Merchandisers Limited in 1966 by EMI Records, to distribute music to non-specialist retailers, and subsequently became a joint venture between a number of record companies. Woolworths became Entertainment UK's largest customer and in 1986 Record Merchandisers Limited was acquired by the Kingfisher Group. In 1988, Record Merchandisers Limited changed its name to Entertainment UK (EUK).
EUK became the property of Woolworths Group plc after the demerger from parent company, the Kingfisher Group, in 2001. In 2006, the Woolworths Group acquired Total Home Entertainment Distribution Limited (THE) to form part of Entertainment UK (EUK) division. In November 2007 EUK acquired Bertram Books, a major book wholesaler and distributor.
EUK was the main supplier of Zavvi under an exclusive supply deal. As a result of EUK entering into administration, on the 24 December the music retailer was also forced into administration as it was unable to source stock on favourable terms direct from suppliers. Zavvi later closed entirely.
Streets Online, founded in 1996 by Stephen Cole, was one of the pioneers of online retailing in the UK. Originally the name behind the online bookseller Alphabetstreet and music site Audiostreet, 85% of the company was bought out by the Kingfisher Group in 2000 for £15.7 million, and then became part of the Woolworths Group with its demerger in 2001. It then became responsible for the web operations of MVC and Tesco. When Kingfisher bought this 85%, the remaining 15% was owned by Sky New Media Ventures (part of BSkyB). In 2003 the company headquarters was moved to the EUK site in Hayes.
See main article: 2 Entertain. 2 Entertain is a joint-venture company combining the former video and music publishing and TV/video production businesses of the Woolworths Group subsidiary, VCI, with the video publishing business of BBC Worldwide. Woolworths are currently in talks with BBC Worldwide for the sale of their 40% interest in 2 Entertain.
See main article: Chad Valley. Chad Valley was launched in 1991 to create an own label range of merchandise. The Chad Valley brand name, which has been in existence since 1860, is used on a range of toys and games suitable for children under 8 years old. Home Retail Group, the parent company of Argos and Homebase, purchased the brand for £5 million on 20 January 2009.
See main article: Ladybird (clothing). Ladybird is a brand of children's wear for children aged 0-10 years which was sold exclusively in Woolworths stores. Before the collapse of the Woolworths chain it was is ranked third overall in the childrenswear market, with a market share of 5%. Woolworths purchased rights to the Ladybird brand in 1984, purchasing it outright from Coats Viyella in 2001. The brand has a history which dates back to a trading partnership beginning in 1934 between the original firm Adolf Pasold & Son and Woolworths. On 1 February 2009, Shop Direct purchased the brand and whole rights from the administrators.
The Winfield brand was launched by Woolworths in 1963 and continued until the 1980s. Goods sold under the brand included household cleaners, groceries, kitchenware, perfumes and other ranges e.g. fishing tackle.
The WorthIt! brand was a value range released by Woolworths in 2007. The first advertising campaign for the brand which first aired on 15 June 2007 introduced the characters of Worth the dog and Wooly the sheep. Further advertising campaigns featured celebrities such as Rolf Harris and Kelly Osbourne. The brand covered a wide variety of products including confectionery, electricals, alcohol, jewellery, perfumes and clothing.