High-street business Woolworths has confirmed it is in talks over the possible sale of its entire retail business for just £1.
The retail chain has been in discussions with a turnaround specialist, thought to be Hilco, about selling all 800 stores for a minimal amount. The takeover will hinge on how much of Woolworth’s £295m debt Hilco could take on, and the move would also need to be approved by the company’s banking syndicate.
A statement seen by Personnel Today said: “The board of Woolworths notes the recent press speculation. The board can confirm that it is in preliminary discussions regarding a possible offer for the retail business. There can be no assurance that any offer will be forthcoming.”
Woolworths would not confirm if the restructuring specialist involved was Hilco. It also refused to answer any questions about whether there would be any job cuts as a result of the sale.
The 100-year-old retailer had suffered sales losses as a result of increased high-street competition and online shops. It appointed new chief executive Steve Johnson in September to help turn the ailing business around, and recently rejected a proposal to buy the entire business from Iceland retail founder Malcolm Walker.
Hilco bought the debt of Allders before placing the department store chain into administration. It claimed that injecting £15m of additional working capital into the chain meant 30 Allders stores could be sold to other retailers, including Debenhams, BHS and Primark, while retaining 3,500 jobs within the business.
Earlier this year, Woolworths’ recruitment head Iain Lewis insisted the retailer’s focus was on preparing for the Christmas rush, despite falling sales. Yet shares at the group have plummeted 70% this year, and were suspended at 3.9p earlier today.