The prospects of a buyer emerging to revive Woolworths’ retail business look slim as the clock starts ticking for administrators to seal a rescue plan.
With rent payments for the store’s 800 outlets due next month, some reports claims administrators would have to find a buyer as soon as next week.
One retail boss told the Financial Times: “We are coming into the busiest days of the year. When the quarterly rent payment comes round [on 25 December] there will be no stock left and no money to pay the rents, so this has got to be a 3½- week job.”
Tesco and Sainsbury’s are among the major retailers thought to have expressed an interest in acquiring packages of stores – around 700 of which already have planning permission to sell food. However, neither is likely to move for a large number of outlets.
Iceland boss Malcolm Walker, who failed with a £50m attempt to buy the chain earlier this year, said the frozen food retailer could move for some of the outlets. But he dismissed the chances of a buyer stepping forward to resuscitate the failed business.
“To run Woolies as Woolies, which is what we wanted to do, is now a lost opportunity,” Walker told the Financial Times. “We’d be keen to buy some stores though for Iceland. I guess lots of people will be interested, even in this climate.”
Neville Kahn, the Deloitte partner who is handling the administration, insisted he was “hopeful” a bidder would be found, with interest also expected from private equity bidders.
“With both the retail and EUK we’ve been flooded with inquiries,” Kahn said. “We’ve got people who want to buy the business as a business and we’ve got people who want to buy stores. We’re talking both to financial players but also to people in the retail trade as well.”
Meanwhile, the turmoil has left customers of the company’s EUK supply arm, which supplies supermarket giants Asda and Morrisons, scrambling to identify alternative sources for DVDs.