Woolworths and MFI going....is it really a problem?
Discussion
I'm not gloating on job losses, it's probably going to be a s
te Xmas for some and that is a great shame and a worry.
However I simply don't believe we should listen to all the hipe. These two businesses for example appear to be outdated, generally selling overpriced tat and they have been left behind by their competitors for some years now.
What did Woolworth actually sell? Pick and Mix, toys and CD's MFI? I've really know idea apart from flat pack furniture that pretty quickly fell apart. Both are very much the poor relation when you compare them against their competitors, Tesco for example are where Woolworth should be, they've just gone out and done the job far better and moved on.
If we weren't in a recession the lifespan of Woolworth & MFI would have simply been longer than it is going to be simply because of the availability money to prop them up, which is exactly the wrong thing to do with struggling business and is almost certainly the main reason why we are in a recession. Whilst these two are struggling other large businesses are posting positive profits regardless of these troubled times. I also note that my local typical large town (Crawley) was heaving a few Saturday's ago - you couldn't move for shoppers with bags of whatever being carried. Same can be said of our 'new' expanded large Tesco last weekend, you'd have thought the end of the world was about to happen the following day the amount of shoppers spending money as if it were going out of fashion!
Therefore, is the 'recession' simply weeding out the weaker businesses and survival of the fittest, leaving stronger better run examples to carry on in the future, and is it [i]really[.i] a problem?
te Xmas for some and that is a great shame and a worry.However I simply don't believe we should listen to all the hipe. These two businesses for example appear to be outdated, generally selling overpriced tat and they have been left behind by their competitors for some years now.
What did Woolworth actually sell? Pick and Mix, toys and CD's MFI? I've really know idea apart from flat pack furniture that pretty quickly fell apart. Both are very much the poor relation when you compare them against their competitors, Tesco for example are where Woolworth should be, they've just gone out and done the job far better and moved on.
If we weren't in a recession the lifespan of Woolworth & MFI would have simply been longer than it is going to be simply because of the availability money to prop them up, which is exactly the wrong thing to do with struggling business and is almost certainly the main reason why we are in a recession. Whilst these two are struggling other large businesses are posting positive profits regardless of these troubled times. I also note that my local typical large town (Crawley) was heaving a few Saturday's ago - you couldn't move for shoppers with bags of whatever being carried. Same can be said of our 'new' expanded large Tesco last weekend, you'd have thought the end of the world was about to happen the following day the amount of shoppers spending money as if it were going out of fashion!
Therefore, is the 'recession' simply weeding out the weaker businesses and survival of the fittest, leaving stronger better run examples to carry on in the future, and is it [i]really[.i] a problem?
Both businesses were running on borrowed time way before the 'credit crunch' or recession started. As soon as things started turning bad then it was game over - the time ran out.
Other retail businesses will soak up any losses and shouldn't be a problem. Then again, both firms have some good locations and a hell of a lot of stock, so they are not going to disappear over night - its going to take months....
Other retail businesses will soak up any losses and shouldn't be a problem. Then again, both firms have some good locations and a hell of a lot of stock, so they are not going to disappear over night - its going to take months....
IMHO woolies just survived as they had high street locations, so were always likely to get some people walking in the door. I have been in one a couple of times this year and always left wondering why there were still around.
There are two electrical retailers who are for want of a better word crap, but also have good high street locations so will always have people walking in the doors. They aren't cheap, their staff are terrible, most people I have asked hate them, yet they are still open as they have great locations.
There are two electrical retailers who are for want of a better word crap, but also have good high street locations so will always have people walking in the doors. They aren't cheap, their staff are terrible, most people I have asked hate them, yet they are still open as they have great locations.
job loss issue aside, most of the posters on this site are in favour of a market economy and vote conservative, strong advocates of free markets. thus surely the demise of woolworths is simply a cause of a change in peoples tastes.
i think its fair to say no longer will people accept the cheap tat that fills their stores. CDs are cheaper elsewhere (should you want a triple pack of "Greatest Hits from the 70s") the clothing is of a poor quality on the whole, the toys are a varied bunch of the traditional and the lights-flashing-noise-generating type. Having worked in the purchasing and retain insustries, their buyers have been panicing for the last five years and have had no idea who their core customer is.
personally i simply believe that Wolloworths have reached the natural end of their life, perhaps as a result of the booming economy we all got used to better quality things which woolworths didnt sell. now the economic downturn presents a new issue, shops like woolworths might have been fortunate enough to get new customers now times were tighter but they are too far gone so to speak to benefit.
i think its fair to say no longer will people accept the cheap tat that fills their stores. CDs are cheaper elsewhere (should you want a triple pack of "Greatest Hits from the 70s") the clothing is of a poor quality on the whole, the toys are a varied bunch of the traditional and the lights-flashing-noise-generating type. Having worked in the purchasing and retain insustries, their buyers have been panicing for the last five years and have had no idea who their core customer is.
personally i simply believe that Wolloworths have reached the natural end of their life, perhaps as a result of the booming economy we all got used to better quality things which woolworths didnt sell. now the economic downturn presents a new issue, shops like woolworths might have been fortunate enough to get new customers now times were tighter but they are too far gone so to speak to benefit.
2something said:
IMHO woolies just survived as they had high street locations, so were always likely to get some people walking in the door. I have been in one a couple of times this year and always left wondering why there were still around.
There are two electrical retailers who are for want of a better word crap, but also have good high street locations so will always have people walking in the doors. They aren't cheap, their staff are terrible, most people I have asked hate them, yet they are still open as they have great locations.
One of them you mention won't be around for long based on this morning's -£29m profit just announced.There are two electrical retailers who are for want of a better word crap, but also have good high street locations so will always have people walking in the doors. They aren't cheap, their staff are terrible, most people I have asked hate them, yet they are still open as they have great locations.
Yet another poor example of a business that really shouldn't be on the high street!
Bernie-the-bolt said:
I'm not gloating on job losses, it's probably going to be a ste Xmas for some and that is a great shame and a worry.
Therefore, is the 'recession' simply weeding out the weaker businesses and survival of the fittest, leaving stronger better run examples to carry on in the future, and is it [i]really[.i] a problem?
IMO you have a simplistic view of those companies that will be affected.As the head of the CBI said 'There will be some very good companies that will go under during this recession' te Xmas for some and that is a great shame and a worry.Therefore, is the 'recession' simply weeding out the weaker businesses and survival of the fittest, leaving stronger better run examples to carry on in the future, and is it [i]really[.i] a problem?
Edited by sb-1 on Thursday 27th November 08:10
Listening to the radio this morning it appears that Woolies have a wholesale company into administration as well. They supply a number of larger media stores (Xaavi and HMV but also some of the large Supermarkets) with CDs and games etc and so a further effect could be those stores unable to source stock at a crucial time for their trading. There'll be some pretty busy Purchasing teams out there this morning!
Added to the number of supplying organisations to those two Companies and yes, it probably is more of a problem than just the direct jobs at risk.
Added to the number of supplying organisations to those two Companies and yes, it probably is more of a problem than just the direct jobs at risk.
Bernie-the-bolt said:
One of them you mention won't be around for long based on this morning's -£29m profit just announced.
Yet another poor example of a business that really shouldn't be on the high street!
PCWorld / Curry's? - http://news.bbc.co.uk/1/hi/business/7751786.stmYet another poor example of a business that really shouldn't be on the high street!
The article implies that PCWorld is doing 'ok', but Curry's is crap. I'd agree with the latter for sure. It's like dawn of the dead going into one of their stores
sb-1 said:
As the head of the CBI said 'There will be some very good companies that will go under during this recession'
Can't be that good if they took investment decisions and had a business model that failed to include some 'sEdited by sb-1 on Thursday 27th November 08:10
t hits the fan what if scenaio plans' Unless, pay the CEO and directors a massive wedge in the good times and sod the 30,000 staff and let it go under in the bad times is a plan.
It worked for Rover's directors.
Mannginger said:
MentalSarcasm said:
LHDisbest said:
Woolworths going under? Gutted 
Where am i going to get my Milka chocolate now?
Waitrose sells it.Where am i going to get my Milka chocolate now?
Or at least the one I go to does.
And it was on sale this week too!
10 Pence Short said:
35,000 odd people hitting the job market in a downward retail sector isn't good news.
Its incredibly unlikely that all 35,000 employees will be let go all at the same time. The two companies have gone into administration, but they continue to trade and employees will continue to get paid. The administrators (E&Y I think!) are sorting through the business to see if it can be made a going concern and will organise the sale of all, part or assets as necessary (to get best value for share holders). That does not mean that 35,000 people will hit the job market all at the same time. Additionally, Woolies alone had a revenue of over a billion quid. That type of business doesn't just disappear overnight and many other retailers will soak up the difference - hence will take on staff to help.
The big problem with Woolies specifically (and has been the case for years) is that they were in the discount side of retail, or at least seen to be. Selling pick'n'mix might seem great, but lets face it, there is sod all profit there - high footfall with low revenue per customer is a nightmare waiting to happen. They also had a debt of 385million which needed refinancing, since getting this finance was always going to be a problem they simply ran out of time. Discount selling on the high street is best left to the PoundSavers etc - Woolies had a business that couldn't go anywhere except down. Management tried to rescue it but failed.
It doesn't mean that they will disappear though. It could be sold as a going concern with the loss making bits taken out. Maybe reduced number of stores etc, but this is the death of the current Woolies, not of the name / brand / group as a whole.
off_again said:
10 Pence Short said:
35,000 odd people hitting the job market in a downward retail sector isn't good news.
Its incredibly unlikely that all 35,000 employees will be let go all at the same time. The two companies have gone into administration, but they continue to trade and employees will continue to get paid. The administrators (E&Y I think!) are sorting through the business to see if it can be made a going concern and will organise the sale of all, part or assets as necessary (to get best value for share holders). That does not mean that 35,000 people will hit the job market all at the same time. Additionally, Woolies alone had a revenue of over a billion quid. That type of business doesn't just disappear overnight and many other retailers will soak up the difference - hence will take on staff to help.
The big problem with Woolies specifically (and has been the case for years) is that they were in the discount side of retail, or at least seen to be. Selling pick'n'mix might seem great, but lets face it, there is sod all profit there - high footfall with low revenue per customer is a nightmare waiting to happen. They also had a debt of 385million which needed refinancing, since getting this finance was always going to be a problem they simply ran out of time. Discount selling on the high street is best left to the PoundSavers etc - Woolies had a business that couldn't go anywhere except down. Management tried to rescue it but failed.
It doesn't mean that they will disappear though. It could be sold as a going concern with the loss making bits taken out. Maybe reduced number of stores etc, but this is the death of the current Woolies, not of the name / brand / group as a whole.
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