The encyclopedia · Sales & Retail · Strategic decision · 1909–2009
Woolworths survived 99 years on the high street — then closed 807 stores in six weeks
From 1,141 shops at its peak to £385M in debt and administration. Supermarkets, the death of CD sales and the 2008 credit crunch finished it.
Woolworths Group · 2008-11-26
What happened
Woolworths opened its first British store in Liverpool on 5 November 1909. At its peak in the late 1960s it operated 1,141 branches, making it one of the country's most recognisable retailers. The 1,000th store opened in May 1958.
By the 2000s the chain was squeezed from every side. Supermarkets like Tesco and Asda undercut it on general merchandise; Wilkinson took its high-street niche; and the collapse of physical music sales removed one of its last profitable categories. In the six months to August 2008 it reported a pre-tax loss of £99.7 million on debts of £385 million.
On 26 November 2008, Woolworths entered administration. Deloitte was appointed administrator. A closing-down sale began on 11 December; on 5 December the chain recorded its best-ever single-day takings of £27 million. By 6 January 2009, all 807 remaining stores had closed and 27,000 jobs were lost. The brand was sold to Shop Direct Group for an estimated £5–10 million and relaunched online, but the website itself closed in 2015.
Why it happened
- The product mix — cheap general merchandise and entertainment — was exactly what supermarkets and category killers could do cheaper and better, and Woolworths had no own-brand moat
- Physical music and DVD sales were a profit pillar that the market removed; the chain had no digital replacement and no time to build one
- The £385M debt and pension obligations left no room to invest in a turnaround when the 2008 credit crunch hit; banks GMAC and Burdale recalled loans rather than back a rescue
- The board rejected a £50 million bid for 819 shops in July 2008; by November, no buyer would meet the lenders' terms
The lesson
A retailer that sells what everyone else sells, at a price nobody can beat, has no business — the high street does not owe you footfall.
Aftermath
Iceland bought 51 former Woolworths sites. The Chad Valley brand was sold to Home Retail Group for £5 million. The Woolworths name was revived online by Shop Direct in 2009 but closed in 2015 and was merged into Very.co.uk. In 2021 the German Woolworth GmbH acquired the British and Irish brand rights.
Sources
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