Retail casualties: Woolworths and KB Toys

 

Woolworths

Woolworths, one of the UK’s largest retailers, is shutting down this month.  While the company is still seeking bids, they are proceeding with ‘shut down’ sales.  Many or all of the stores could be closed by the end of December.  Woolworth’s sells things ranging from candy (of which it sells more than any other British retailer) to DVDs and video games.  Woolworth’s problems will affect many other companies such as Sony, Nintendo and Microsoft, all of which are owed millions of pounds. Woolworth’s, like many brick and mortar stores, has had to deal with online retailers, specialty stores and supermarkets.  In went into administration (like chapter 11 bankruptcy here in the States) on November 27.   Woolworths is a descendant of the F.W. Woolworths chain here in the United States.  The British Woolworths chain started in 1909 and was sold from the parent company in 1982.

KB Toys 

KB Toys has not only filed for bankruptcy, it announced the closure of the entire chain.  The timing of the announcements caught some off guard, but most of the so-called ‘experts’ thought it would come in January.  The company said that sales were down over 20% from last year.  KB has been in trouble for quite a while and, apparently, distributers were uneasy about shipping goods to the chain. KB had already slashed prices in what was a ‘blow out’ sale, sadly it is now a closing sale.  KB operated 277 mall stores, 114 outlet stores and 40 KB Toy Works stores.  It has 4,400 employees.

Both of these closing are particularly striking to me.  Woolworths, with two proud heritages, is one of the largest retailers in the UK.  It sells more candy than any other retailer in Britain.  Is a top five seller in many categories and it’s going belly up.  KB Toys, I always thought, was bulletproof. Sadly, over the last few years, the stores have just gone to hell.  I think it’s decision to ditch video games was the start of it’s downfall.  Yes, they carry some games, but not like they used to.  In fairness, that particular part of the industry is very volatile yet it is also the one part that has has had steady growth.  Of course, if your stores are tiny, cramped and feel ‘old’ like many of the KB stores did, then people just are not going to frequent the business. I know I hate going into a store and coming feeling and smelling like a sardine.

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