It looks like times are getting even tougher for Woolworths. As here, the economy in the UK is weak, and a poor economy brings the weaknesses of companies to the surface (e.g., Mervyn's, Boscov's, Steve & Barry's). The boss has been canned and sales are down:
Variety store group Woolworths revealed a like-for-like sales decline of 6.7 per cent at its core retail business in the six weeks to July 26.
Group sales for the 25 weeks to July 26 slid 3.1 per cent and sales for Woolworths Retail dropped 3.2 per cent.
A high proportion of sales came from low-margin entertainment products such as CDs and DVDs, which, along with clearance, means that margin in the first half is likely to be down 125 basis points versus last year.
And, inevitably, the word now is that there will be a takeover:
Iranian property investor Ardeshir Naghshineh fuelled the rumour when it was revealed, after the markets closed that he had upped his stake in Woolworths to 9.68 per cent.
He is understood to be trying to put together a bid consortium for the beleagured retailer.