Woolworths in talks to sell retail stores
Source says Hilco in line for purchase at nominal sumStruggling sweets-to-CDs U.K. retailer Woolworths is in early talks to sell its high-street business for what one industry source said is likely to be a nominal sum.
The source said the 99-year-old group, one of the nation's best-known store chains, is in talks with company-restructuring specialist Hilco.
The retailer confirmed it is in early talks on a possible offer but named neither the potential buyer nor a sale price.
Woolworths, which runs about 800 shops and also has a DVD publishing and distribution business, declined comment specifically on any deal with Hilco but did confirm talks are taking place.
"The Board can confirm that it is in preliminary discussions regarding a possible offer for the retail business,” Woolworths Group said. “There can be no assurance that any offer will be forthcoming.”
Hilco was not immediately available for comment.
Earlier, the Times of London said Woolworths is in talks to sell its retail business to Hilco for only 1 pound ($1.50).
In August, Woolworths rejected a bid approach of about 50 million pounds ($75 million) for its retail business from a consortium led by Icelandic investor Baugur.
At 8:40 a.m. Wednesday, Woolworths shares were down 12.1% at 3.35 pence (5 cents), valuing the group at about 49 million pounds ($73.5 million).
Woolworths, which demerged from Kingfisher in 2001, has been struggling for years in the face of growing competition from supermarkets, online retailers and specialist players.
Its problems have been exacerbated in recent months by a rapid downturn in consumer spending, which has forced a string of retailers, including furniture sellers MFI and ScS Upholstery, into administration, a form of creditor protection.
Woolworths posted a record first-half underlying pretax loss of 90.8 million pounds in September and scrapped its dividend.
Bank of Ireland division Burdale Financial and GMAC Commercial Finance will be key players in any Woolworths sale. Together they lent Woolworths 385 million pounds ($577.6 million) in January. The pair appointed Deloitte to represent them in talks with Woolworths last month.