Prices slashed in Woolies sale as Dragon pulls out of rescue bid

MILLIONAIRE entrepreneur Theo Paphitis has pulled out of a possible deal which could have saved the jobs of employees of the Minehead branch of Woolworths.
The troubled retailer went into administration last week with debts of £385 million and receivers Deloitte was immediately approached with several inquiries about purchasing the chain.
Mr Paphitis, a star of the BBC Dragon’s Den television programme, was said to be interested in bidding for some of the more profitable Woolies stores and maintaining the Woolworths brand.
However, the Dragon has now pulled out and said in a statement: “Unfortunately, the constituent parts of Woolworths are more valuable than the whole.
“The administrators have a difficult job to do and I appreciate they need to get the highest cash value for the business.
“I hope that an alternative proposal succeeds in securing the future for the many Woolworths employees involved.”
Mr Paphitis has previously revived troubled brands such as La Senza and the stationary chain Rymans.
His withdrawal leaves the future of 30,000 Woolworths jobs in doubt, although Deloitte said the stores would continue throughout the Christmas period and money had been ring fenced to pay salaries.
It is now expected that most of the stores will be sold in small groups to a number of different bidders.
The deadline for bids for single or small groups of stores was 4 pm on Wednesday.
Supermarket firms Tesco, Sainsbury’s, Asda, Waitrose, the Co-op, and discount chain Poundland were all said to be interested in some of Woolworths’ prime high street locations.
The largest shareholder in Woolworths, Ardeshir Naghshineh, was also reported to be preparing a bid for the company.
Woolworths will tomorrow start its ‘biggest ever’ sale in an effort to shift large volumes of stock, slashing prices by up to 50 per cent across its product range.
Deloitte partner Neville Kahn said: “We anticipate increased footfall in the stores and have hired additional staff to cope with increased demand.
“Additional goods have been moved to all stores and further stock will be added in the coming days.”
Woolworths Group, which has a 40 per cent stake in 2Entertain, a joint publishing venture with the BBC, is also likely to be placed into administration.

Dragon's Den star Theo gives hope to Woolies staff

BBC Dragon’s Den star Theo Paphitis (pictured) may launch a buyout of Woolworths which could save the jobs of dozens of workers in the company’s Minehead store.
Woolworths went into administration last week with £385 million of debt, but administrators Deloitte said it was hopeful of finding a buyer for the chain, which has 30,000 employees and 815 stores.
Mr Paphitis is said to be one of several people showing ‘substantial interest’ in the firm.
The millionaire businessman said in a statement: “If we were successful in our negotiations, then it would be my priority to safeguard the future of as many of the employees as possible.
“I would want to keep the Woolworths name alive as it is held with such deep affection, and I would of course want to keep trading as many of the high street stores as possible.”
Mr Paphitis said a speedy resolution was ‘absolutely crucial’ to keeping Woolworths together.
“I have a great belief in the Woolworths brand and would love to see the name remain on the high street,” he said.
Deloitte’s Neville Kahn, Nick Dargan, and Dan Butters have been appointed joint administrators to Woolworths plc and Entertainment UK (E UK) Ltd, the wholesale division on Woolworths.
Mr Khan, the reorganisation services partner, said: “Woolworths has suffered a number of cash flow problems.
“Strenuous efforts over recent weeks to keep these companies going have unfortunately failed and the businesses are now looking to be rescued under the administration process.
“The company will continue to trade. Stores will remain open past Christmas and employees in stores will be paid.
“We have mobilised a large Deloitte team to stabilise the business, and have hired Hilco as our agent to assist in the management of the retail business.
“We appreciate the co-operation and support from the management and staff.
“We are glad that arrangements are in place to ensure that all wages will be paid in full this week.”
Mr Butters said: “We are working hard to ensure that any sale of the business, whole or part, will preserve jobs.”
As well as trying to find a buyer for Woolworths, Deloitte will also be seeking to retrieve something for those owed money by the company, including banks and suppliers.
Mr Butters confirmed how within 24 hours of Deloitte’s appointment as administrators, expressions of interest in Woolworths had been received from ‘a number of parties’.