Wednesday, 26 November 2008

Nightmare on the High Street

Today has seen the recession take two major scalps. Woolworths, the High Street retailer with 815 stores (which unfortunately it only leases and doesn't own) has filed for administration, effectively declaring itself bankrupt. Furniture retailer MFI is expected to do the same within the next few minutes. Twenty-six stores will close; the company may continue trading in some reduced form.

Neither of these events was unexpected. Woolworths has been seeking a buyer prepared to part with £1 for the whole operation, and it looks like no-one came forward. Perhaps the lack of capital and the £300m debt put people off. How ironic though that you could have bought the company for the price of a small bag of their famous pic 'n' mix. (For non-UK readers, pic 'n' mix is a self-select candy facility sometimes also called Candy King.)

MFI was less expected but with the complete collapse of the housing market they were never going to be far behind. Most new furniture and carpets are sold so recently bought houses can be refurbished.

Anyway, the "take home" from all this is that the recession has now left the finance and property sectors and has gone mainstream. More big names will undoubtedly follow.

Sources: here and here

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