Wednesday, 26 November 2008

Woolworths - the end is close

I get very squeamish when I encounter stories like this one. Woolworths looks like it is about to sink. Around 30,000 people will lose their jobs, with another 20,000 retirees facing the prospect of losing their pensions. While I might understand the logic of the market, I really hate hearing stories of mass redundancies.

Mandelson has called in Woolworth's bankers to ask why the company is being pushed into admininstration.

It is an fascinating question. Where would an answer start? I don't think it would be enough to simply say that consumer spending has just fallen off a cliff. Nor would it be enough to say that consumers have disappeared because of the credit crunch.

No, the answer would have to go much deeper than that. It would have to start with the appalling policy errors that generated a massive credit bubble, which in turn, led to the horrific crash that now stands before us.

If Mandelson is looking for the real answer to his question, he shouldn't be asking Woolworth's bankers, he should be asking the clowns that sit with him around the cabinet table.


Anonymous said...

Woolworths is failing because nobody wanted to buy anything from their shops. I don't see this as being connected to the global financial world.
Do you remember Spud-U-Like? A roast potato fast food shop. They went bust as well.

Anonymous said...

Woolworth's is a little more substantial than a niche retailer - even one that lasted for about 25 years.

Woolworth's is well over a hundred years old and has managed to survive the great depression, two world wars and the Spanish flu. That kind of durability kind of makes you wonder what really went wrong.

And no doubt a lot of people invested their careers in it because of that sense of permanence. And, sadly, their pensions.

Nick von Mises said...

Agreed, Alice.

How can 20,000 people lose their pensions? Now there's a story Mandy won't want answered properly. Might the reply involve Browns pension raid, or his FTSE bubble, or his failing to make companies fund pensions according to real actuarial numbers?

Sure it sucks to be one of the 50,000 but all that is happening now is reality is being recognised.

Anonymous said...

I went in Woolies yesterday in yet another vain attempt to find something useful. I used to buy all kinds of things there. When we came back to the UK in 1999, we bought all our kitchen stuff there. Everything! Now they sell almost nothing of any use, having shifted loads of their shelf space to electronic games and other e-junk. It's sad, but what can you do when management misjudges the market so badly.

Nick Drew said...

how long before we wake up to Mandy telling us that Gordon's indisposed ...?