Entertainment retailers will be keeping a close eye on the impact of a decision by Woolworths’ administrators to slash prices by up to 50%.
The troubled retailer went into administration — roughly equivalent to Chapter 11 bankruptcy in the U.S. — on Nov. 27 along with Woolworths Group’s wholesale entertainment distributor EUK.
Neville Kahn, joint administrator and reorganisation services partner at Deloitte, said in a statement: “We have launched Woolworths’ Biggest Ever Sale today with discounts of up to 50% on all goods (except concessions). 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.
“There is continuing interest in the core Woolworths business and the Sale will continue whilst potential buyers finalise their plans for the purchase of the business.”
Other retailers are watching the situation with interest. A spokesman for market-leading music merchant HMV tells Billboard.biz, “This could act as a powerful incentive for bargain-hunting customers, though many of these could be drawn from the supermarkets.”
The administrators have also announced redundancies in the company’s support operations at Marylebone Road, London, and Castleton, Rochdale; around 450 staff have been made redundant out of a total of 25,000. There have not been redundancies in the stores, distribution centres or at EUK.
Kahn added: “The stores and distribution centres will continue to trade as normal, but with a simplified core structure supporting them going forward. The administrators, supported by management, are still actively seeking a purchaser for the business as a going concern, with discussions being held with a number of interested parties. We are working hard to ensure that any sale of the business, in whole or in part, will preserve jobs.”
He said that the “expectation” is that stores will remain open past Christmas.
Commenting specifically on EUK, Dan Butters, reorganisation services partner at Deloitte, said in a statement: “We have held face to face meetings with the majority of customers and are engaged in constructive talks with both suppliers and customers to make arrangements to resume business.”