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Repercussions of retailers' demise weighs heavy
Archived article dated Friday January 23rd 2009
Much has been written about the sad demise of Woolworths and its collapse after 99 years of trading in the UK but spare a thought for the other losers in this story. They include the many suppliers who relied on the retailer for a significant chunk of their business.
By Glynn Davis
This was either as recipients of goods from Woolies as in the case of Zavvi that bought the bulk of its music from the Entertainment UK distribution arm of Woolworths. The inability to get hold of stock prior to Christmas led to the premature death of Zavvi before its management had really been given sufficient time to establish it as a business outside the Virgin empire.
Then there are the suppliers to Woolies. There will be many that have found their sales shrivel up as the high street giant will likely have accounted for a decent chunk of the turnover of many small operators. One such company was Doncaster-based Miller Brothers that sold electrical goods both to consumers and to retailers like Woolies. This is a tough category to be in at the best of times but with Woolworths no longer a customer of the company a big hole was blown into its balance sheet. It was too big for it to recover from and it forced the family-owned business to close its doors.
The other losers from Woolworths' demise are all those consumers that are still left with gift vouchers. I don't know how many are still out there but my guess is a fair few. As soon as the Woolies stores closed their doors for the last time then these vouchers became worthless.
My advice to anybody out there with vouchers in any retailer that looks slightly rocky is to spend them now. Otherwise there is a risk of getting caught up in the wash that inevitably follows the sad closure of any retailer.
glynnd@theretailbulletin.com
Tagged as: glynn davis | viewpoint | woolworths | zavvi
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