Woolworths fell into administration on Wednesday, putting 30,000 jobs at risk on a bleak day for UK retailers. The troubled variety store chain failed to get sufficient backing from its banks to overcome a cash crisis and directors met to appoint Deloitte as administrator just after MFI, the struggling kitchen seller, which employs about 2,000 people, also filed for administration. As consumer spending and credit availability tightens, smaller retailers have already failed but Woolworths’ collapse is the biggest retail administration in the UK for many years, and comes as surviving retailers wage an increasingly desperate promotional battle to attract shoppers. The decision to appoint administrators came despite late moves by the government and BBC Worldwide, which seemed to offer hope for the group. The government called in Woolworths’ creditors and directors for talks Tuesday night, but offered no financial support. Burdale and GMAC are the lead creditors to Woolworths’ £385m facility. In Lombard’s view, Woolworths is a “sad but inevitable victim of crisis”.

This entry was posted by Gwen Robinson on Thursday, November 27th, 2008 at 5:46 and is filed under Capital markets, M&A. Tagged with Burdale, GMAC, MFI. Edit this entry.