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Background

After 99 years of trading in the UK and with a £2.1 billion turnover, 819 stores and 27,000 employees, Woolworths was widely regarded as a bellwether of the retail sector. However, the business was struggling financially with the burden of lease arrangements stemming from its 2001 demerger from Kingfisher, combined with an inefficient buying structure and uncompetitive customer proposition.

With a £365 million debt burden, the latest lender to the company was a syndicate of asset based lenders whose focus on asset levels led them to conclude in 2008 that they could no longer fund the business.

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Hilco Capital’s role

  • Offered to acquire the retail division along with its liabilities in order to restructure core business
  • Offer accepted by the company but rejected by its lenders, placing the retail business into administration
  • Engaged by the Administrators to operate Woolworths while buyers sought for all or parts of the business
  • Managed supplier liaison and negotiation of Retention of Title claims
  • Managed discount and marketing strategies
  • Deployed over 100 retail support specialists to manage operations at store level
  • In the absence of buyers for the business, Hilco Property appointed to manage disposition of 807 properties

 

 


Results

  • Biggest Ever Sale promotion delivered the highest single day’s sales in Woolworths’ history at £27m
  • Largest retail inventory liquidation in Europe completed within just six weeks
  • Unlocked supply chain to maximise stock flow into stores in critical pre-Christmas trading period
  • Achieved 100% recovery of ABL borrowings and exceeded all financial targets
  • Recovered £280m cash to the administration after all operating costs
  • Leasehold disposal achieved net property recoveries in excess of all expectations
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