Restructuring Woolworths Group Plc. - The Attempt that Failed


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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:

Price:
Case Code : BSTR323 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges

Themes

Restructuring / Turnaround Strategies
Case Length : 19 Pages
Period : 2001-2008
Pub Date : 2009
Teaching Note : Not Available
Organization : Woolworths Group Plc.
Industry : Retail
Countries : UK

Abstract:

Woolworths Group Plc. (Woolworths) was a 99 year old multispecialty retailer and wholesale distributor of entertainment products chain in the UK. Woolworths had two broad lines of business - a retail arm Woolies and wholesale distribution of entertainment products. Since the year 2001, Woolworths operated in a highly competitive retail environment alongside supermarket chains. Faced with high debt of £ 350 million and slowdown in retail industry in the UK, Woolies and Entertainment UK, Woolworths' wholesale entertainment distribution arm, were forced to file for administration on November 27, 2008. The appointed administrators were unable to revive Woolies even in its peak Christmas season and were also unable to bring about conclusive deals to sell off Woolies as a going concern.

Ultimately, Woolworths had to close down all Woolies stores in a phased manner by January 06, 2009. After the closure, the name Woolies was planned to be relaunched based entirely on an online mail-order retailing and delivery format by summer of 2009. This case study examines the problems experienced by Woolies and debates whether its retail and entertainment chains could have been saved and revived.

Issues:


» Understand the importance of changes in the economic environment on the sustainability of an organization.

» Analyze the risks involved in using long term financing sources to fund working capital requirements and its effects on debt and solvency of the business.

» Assess the impact of the global, economic and local market environments on exposing the inherent weaknesses of an organization.
 
» Analyze the strengths and weaknesses of a retail organization.

Contents:

  Page No.
Introduction 1
Background Note 2
Restructuring at Woolworths 4
The Fall Begins 6
Woolworths in the Red 10
The Aftermath 12
Exhibits 14

Keywords:

Woolworths Group Plc, Woolies, Credit Crunch, Woolworths' Demerger from Kingfisher, Administration, Kingfisher Group Plc, Restructuring, Leverage, Debt Management, Operations Management, Insolvency, Supply Chain Restructuring, Business Simplification Strategy, Entertainment UK, Cost Control, Global Financial Crisis, Financial Statements of Woolworths Plc, Job Losses, Financial Closure

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