Woolworths has filed for administration after losing the support of its lending banks.
The retailer lost its battle to stay afloat after failing to secure the sale of its retail business and has called in accountancy giant Deloitte to deal with its £385m debt.
The news plunges into doubt tens of thousands of jobs across the Woolworths group, with 25,000 employed by its struggling retail business and a further 5,000 by its EUK distribution arm.
Yesterday it emerged that the group had agreed to sell its 60% stake in the 2entertain DVD business to venture partner BBC Worldwide, the broadcaster’s commercial arm, for £100m. The sale is expected to go ahead despite today’s news.
In a statement the Woolworths board confirmed that “discussions relating to the potential sale of its retail business have now ended”.
“Following, and as a consequence of the termination of those discussions, the boards of Woolworths plc and Entertainment UK Ltd have concluded that there is no longer any prospect of those businesses being able to operate as a going concern.
“Accordingly, the boards of both companies last night resolved to file petitions for administration in the High Court.”
The news comes on a bleak day for UK retail, with furniture store MFI also filing for administration after several years of financial uncertainty.