Page last updated at 12:00 GMT, Monday, 2 February 2009

Woolworths is to be reborn online

A Woolworths store
The closure of Woolworths prompted huge job losses

The Woolworths brand is to be relaunched as an online retailer after being bought by Daily Telegraph owners, Sir David and Sir Frederick Barclay.

The much-loved High Street chain went into administration in November and its more than 800 stores closed a month ago after struggling with debts of 385m.

It is thought only a fraction of the former total of almost 30,000 staff will get their jobs back.

Woolworths' children's clothing label Ladybird is also to be re-born online.


The brands are being bought by Shop Direct Group, owned by the Barclay twins, for an undisclosed sum.

They will sit alongside their other online retailers, including Great Universal and Marshall Ward.

Shop Direct, formerly Littlewoods Home Shopping, last week announced that it would cut 1,150 jobs in north-west England, mainly from its Crosby call centre.

'Prosper again'

The company's chief executive Mark Newton-Jones said he was confident about Woolworths' future.

"This is great news and we are confident that Woolworths, as an online brand, will once again prosper and quite rightly stay at the heart of British retailing."

We are pleased to have achieved a deal which will enable the Woolworths and Ladybird childrenswear brand names to continue
Neville Kahn, of administrators Deloitte
He said it was hoped to launch the new venture by the summer.

"It would have been a tragedy should the name have disappeared," Mr Newton-Jones said. "It is an iconic name."

Details of the new product ranges to be offered will be announced in the next few months.

"Essentially we will sell children's clothing through the Ladybird name and also other products," said Mr Newton-Jones.

"But what we're looking to do is encourage customers to come to us and tell us what they would like to see from Woolworths and what they liked and disliked and we've set a website up already. You can come and register online with us this morning and tell us the sort of products you'd like to see."

Value issues

Retail consultant Teresa Wickham told the BBC that the online retail landscape was now a "very competitive marketplace".

"Amazon is intending to sell groceries online, and Tesco is going to sell clothing online," she said.

"If Woolworths can pick up on what was good about it - such as Ladybird and Chad Valley - then they could capture a new market. They have also got to show very good value.

"In many ways this is the ideal time for this move though, while the brand is still fresh in people's minds."

She said that those who shopped on the Woolworths website would not automatically be those who shopped at the High Street stores, as many of those personal shoppers were elderly, and not necessarily internet-aware.

But she added: "People are generally getting more used to buying online, and the online clothing sector is predicted to grow over the coming year."

Supply issues

The Woolworths' store closures followed a clearance sale, which saw stock and fixtures and fittings being sold at discount prices.

Empty stores in prime High Street locations are likely to be reopened by other businesses, with frozen food chain Iceland to buy 51 stores.

Debt-laden Woolworths saw its difficulties compounded last year when it was forced to pay cash when buying goods from suppliers.

Trade credit insurers were no longer prepared to cover its suppliers in case Woolworths was unable to pay for the stock.

Store sales continue

Joint administrator Neville Kahn, of Deloitte, said: "We are pleased to have achieved a deal, which will enable the Woolworths and Ladybird childrenswear brand names to continue.

"It is clear that the British public has a great affection for Woolworths and we are delighted that the Shop Direct Group will be keeping the name alive."

"The process of selling the Woolworths property portfolio continues with former stores under offer from prospective purchasers."

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