Poor Old Woolworths

Woolworths has long been a feature on many UK high streets, however it’s troubles seem to have no end as sales fall by 6.7% compared with last year and it’s shares hit an all time low.

Can Woolworths survive?

Visiting the Woolworth’s “Pick ‘n’ Mix” sweet counters will feature in many Brit’s memories of childhood. With 800 UK stores, Woolworths has taken pride of place on almost all town centres throughout the country.

Times are very hard for Woolworths now though. With sales down 6.7%, it’s Chairman leaving and shares currently trading at 5.81p, the situation is looking bleak for this major retailer.

There is more to Woolworths than just its retail operation, though. It owns 2 Entertain, a DVD publisher that supplies comedy and nature films in a joint venture with the BBC.

Woolworths also owns Entertainment UK which supplies many supermarkets, amongst a range of other retailers, with DVD’s.

As part of a plan to refocus, Woolworths is developing a strategy to regenerate its business around its smaller stores as these are often the largest retailers on many small town high streets. As many as 300 stores may be closed during this restructuring exercise.

It is the ownership of its’ DVD publishing and distribution companies, as well as a plan to exploit its retail niches, that must give beleaguered shareholders cause for some hope.

A new Chairman, when appointed, must inject renewed vigour into Woolworths, even during these difficult times for retailers.

Maybe Woolworths is ripe for a take over, given the number of high street stores in well placed retailing positions.

At 5.81p, Woolworth’s shares may offer a very speculative opportunity. They will probably go down further in the retail gloom, but might have been oversold. You must make your own mind up about that.

Note: I do not currently hold any shares in Woolworths. This information is for your education only and in no way should it be considered investment advice. Shares can go down as well as up.

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