Woolworth’s gone bankrupt?
I have not really followed international news and became only today aware that Woolies in the UK has gone under administration and failed to be sold to a buyer. With 5th January 2009, 32,000 workers will be on the street and more than 800 stores will close down.
The company has struggled under the weight of £385m of debt. Its problems were compounded over the past couple of months when it was forced to pay cash when buying goods from suppliers, because trade credit insurers were no longer prepared to insure suppliers to Woolworths – many blame it on the economy, I personally blame it on badly managing a company and not re-inventing the company’s purpose.
Why else would Woolworth Germany and our local Woolies do so well? Quite easy, the Germans rely on the nations “cheap mindset” and market very affordable goods. The South African Woolies is focused on quality and it’s customers are based in the affluent markets. Although there are stores everywhere, the product pricing hardly allows for everyday shopping (compared to Spar, Pick’n Pay and others).
In my opinion Woolies quality of product and freshness sucks compared to our local Spar – its all up to how a store or a chain is managed.
Plenty of people blame Woolworth’s demise on the economy – I am glad to live in South Africa. Not just will the petrol price again drop by R1.50 in January, we we will see at least a 200-base point drop in interest in the next 4 months. Our great country has not experienced any of the world-economic issues many of the other “industrialized” countries have experienced – so why do people emigrate again?