Thursday, June 25, 2009

Woolworths returns as online shop!

A Woolworths store (in November 2008)
The closure of Woolworths' shops led to vast closing down sales.

The Woolworths brand is about to begin trading as an online business, more than five months after the ex-High Street giant went into administration.

Shop Direct Home Shopping reportedly paid administrators between £5m ($8.24m) and £10m for the brand name.

Goods on woolworths.co.uk include toys, Ladybird clothing and the firm's iconic pick n' mix confectionery.

In December, Woolworths' 807 stores and distribution arm, EUK, went into administration, with £385m of debt.

Shop Direct is part of the Littlewoods group, which is owned by Sir David and Sir Frederick Barclay, and which already runs Littlewoods Online, one of the largest UK web retailers.

Within hours of the announcement that the brand was to return online, 20,000 customers were said to have registered.

They were then encouraged to suggest what they would like the store - which opens from 0600 BST on Friday - to sell.

"Families wanted us to bring back Woolies as soon as possible, so that's what we've done," said Shop Direct chief executive, Mark Newton-Jones.

"From acquiring the brand to launching it has only been 20 weeks; something you could never achieve with a High Street business but can do online.

"We're aiming to create a fun, family web experience which keeps on getting better and better."

Rising rents and a recession-induced cash crisis brought to a head Woolworths' long-running problems, which were largely attributed to its outdated business model.

Administrator Deloitte has said that about 180 stores have been sold or are under offer with buyers including discount stores such as Poundland.

Supermarkets including Iceland, Tesco, and Sainsbury have bought properties from Woolworths, while others have been snapped up by local authorities.

Other retailers are understood to be waiting until the leases are returned to their respective landlords to negotiate a better deal.

In January this year, the former Woolworths branch in Dorchester was reopened by a former Woollies manager as Wellworths and celebrated its 100,000th customer in three months.

BBC NEWS REPORT.

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