Archive: Entertainment UK

One question that many of my friends have asked me over the past couple of months is, did I see it coming? For many, it was a shock that an institution like Woolworths could even be in mild difficulty, never mind on the brink of going out of business. But the honest answer to their question was: yes, I did see it coming. And I wasn’t the only one.

What was shocking was the speed with which it did happen. I thought everyone involved would at least give Woolworths a chance over Christmas. But the depth of the trouble to hit the High Street was even greater than I had imagined, and Woolworths was essentially given its last chance in mid-November.

I was first aware of the possibility of Woolworths getting into financial difficulty being raised in early 2007. Everyone was paid to come in for an hour to attend a meeting. If memory serves, we were basically told to ensure that standards were kept high and that displays were set up how they should be. During this talk the possibility that Woolworths might go out of business was brought up.

Back then, it seemed like a distant possibility. Nonetheless, it didn’t take me long after I started working for Woolworths in July 2006 to wonder if the company might be in a spot of bother. For the entire time I worked there, our shop never had working air conditioning — and I know that ours wasn’t the only one. Apparently they couldn’t afford to fix it. Temperatures were almost unbearably high during the summer, and I frequently overheard customers mentioning the terrible heat inside the shop. That seems to me at least one possible reason why footfall may have decreased.

Meanwhile, the fact that it took six weeks for my name badge to arrive, and the fact that I never received a uniform was a sign of, if not financial problems, at least incompetence somewhere or other in the chain. (I did have a uniform, but my Woolworths polo shirt was the one given to me on the first day which I believe was my manager’s old one. I didn’t kick up a fuss because it did the job just fine. I never got a fleece though!)

Meanwhile, we ran out of basic supplies, in my view, alarmingly often. It wouldn’t surprise me if other shops ran out of stuff from time to time. But we completely ran out of carrier bags at least once and had to resort to using bin liners (a scenario which was repeated when things unravelled in December 2008). Perennially we lacked tissue paper with which to wrap fragile goods. We also often ran out of the paper we needed to make temporary price labels.

When I started I am sure we had five (or maybe even six) Piccolink “guns” — the hand held stock management devices. These reduced in number over time until at the end we had just two — and they were both broken. These devices were almost essential to do our job, and the shortage was the source of much frustration.

For a couple of months after the Christmas 2006 period, supplies of stock seemed to completely dry up. The stockroom looked pretty empty and certainly in my department we started selling the dregs of the inventory in the stockroom. At first I thought maybe it was normal for just after Christmas. But when more experienced colleagues told me they had never seen the stockroom so empty, the signs pointed to the fact that the company was facing difficulties.

After a relatively benign 2007, sales fell off a cliff throughout 2008. My workload was noticeably lower in 2008 than it was in 2007. When the credit crunch worsened that summer, I began to think it was more likely than not that Woolworths would fall victim. Things were bad for the company anyway, but if things became bad for the economy as a whole as well it was difficult to see a way out.

Any notion that top management stuck its head in the sand should be dispelled. Even though on the surface Woolworths didn’t change much, there is no doubt that they were looking for a solution. Unfortunately, they came across the wrong solutions.

It is too easy to blame the demise of Woolworths on the credit crunch. Although High Street retailers are undoubtedly feeling the effects of the current economic situation, a good business can still survive with little problem. Sure, in a more benign time when credit was more available, Woolworths would have found it easier to borrow more money to survive another year.

But unmanageable debt — all £385 million of it in Woolworths’s case — will come back to bite when times are tough. In a way, Woolworths was lucky that the past decade or so was so benign. It was given the benefit of the doubt by the favourable economic environment.

Obviously things unravelled quickly in November. It became clear that Woolworths was in talks with Hilco, a company that specialises in turning around distressed retailers, to sell the retail arm of the business for £1 and offload a significant chunk of the debt. That was a sign of extreme desperation. Woolworths was looking to get rid of its core retail business by any means, in the hope of salvaging the more profitable businesses Entertainment UK and 2 entertain.

In the end, the banks refused to back such a deal, opting instead to recover their money. The retail arm and Entertainment UK both went into administration on 26 November 2008. From a business point of view, it was a shame that a profitable, successful business like EUK had to be brought down along with the shops. That had a more-or-less direct consequence on another major retailer, Zavvi, which relied on EUK for all of its supplies.

The disappearance of Woolworths also means the disappearance of other well-loved brands. Children’s clothing brand Ladybird has a history and involvement with Woolworths stretching back to 1934. It became exclusive to Woolworths in the 1980s and was bought outright by the company in 2001.

Meanwhile, the historic toy brand Chad Valley has also fallen victim. Like Ladybird, Chad Valley has a long history going back to 1860. Chad Valley withered on the vine in the 1980s, but Woolworths bought the name in 1991 and it became the store’s own brand toy make. Administrators are hoping to sell both brand names, and I would have thought the chances of these brands surviving in some form in the future are high.

Another Woolworths brand might not be so sorely missed. The WorthIt! value range was a recent addition, only launching properly in 2007 after a trial period. I think it made a good name for itself, particularly in affordable electronic goods. The likes of WorthIt! kettles and WorthIt! microwaves flew off the shelves.

A lot of WorthIt! products were cheap and nasty though. It was difficult to suppress the giggles when WorthIt! toilet seats were returned because they cracked under the weight of enormous bahookies. I would have thought a sale of the WorthIt! brand is less likely, given that it was pretty much intrinsically tied to Woolworths, right down to the punning name.

I have felt very sad about the demise of Woolworths ever since the business began to unravel in front of my eyes around two months ago. I was not sad so much because of my job — I was planning on leaving after the Christmas period anyway. I was just sad to see Woolies go because I was genuinely fond of it as a shop.

I always quite liked the idea that I worked for Woolworths, which had been one of my favourite shops as a child. Kids loved Woolies. I heard a story from another store about a child who enquired to his mother, “Is this Woolies branch closing as well?” When she said they were all closing, the child burst into tears. When I was on the tills during the closing down sale, I heard another child say, “Don’t give us any change!”

My personal affection for Woolies is more surprising because there wasn’t even a branch in Kirkcaldy when I was growing up. There had been a branch at the east end of the High Street, but it had gone by the time I could have any memories of it. It was one of the branches that were sold off in the 1980s.

Today the building houses the Kirkcaldy Indoor Market. But is still very recognisable as a Woolworths, with that classic design of the entranceway that was used for so many Woolworths branches up and down the land.

In the 1990s, there was a small Entertainment-only branch of Woolworths in Kirkcaldy that was more or less in the centre of the High Street. But it closed long before I was old enough to have an interest in buying music, and I have no memory of being in the store at all. That unit has since been an Our Price, a Ponden Mill and latterly a bicycle shop which I think has now closed down.

No, my memories of Woolies came from nearby Glenrothes. I have relatives in Glenrothes, and we would frequently visit, often popping into Woolworths on the way back. When I was a child there was something magical about Woolworths. Maybe it was all the pic ‘n’ mix sweets that I was seldom allowed to buy. I still remember the quaint stickers that used to adorn the pic ‘n’ mix stands — “Please buy before you try” and messages like that.

I always used to wonder why Kirkcaldy didn’t have a Woolies store. It made Glenrothes seem like such a superior town. When I had my job interview at Woolworths, I was asked what I liked most about Woolworths. My answer spoke about how I thought Glenrothes was a better town than Kirkcaldy because it had a Woolies. It must have sounded like I was taking the piss, but it was true.

Woolies finally arrived back in Kirkcaldy in 1998, and it was a large store at that. It filled part of a huge unit that Tesco had recently vacated, having just bought Wm Low whose Kirkcaldy store was judged to be in a better location. From then on, Woolies was always a trusty destination particularly when I had to buy gifts. It is no surprise that Woolworths made most of its profits at Christmas, because in Kirkcaldy at least it was more or less the only place you could find a decent selection of chocolates.

Woolies was also unquestionably useful for other odds and ends. The problem was, you couldn’t always quite tell what odds and ends you would find there. Quite soon after I started working there I clocked that customers were frequently unsure about what Woolies actually sold. I was as well. Even after working there for two and a half years, I would still sometimes be stumped by a question a customer asked about the products we sold, and I would have to go on a wild goose chase to find out if we stocked it.

The store’s role as an events retailer also meant that the range would radically change throughout the year as a matter of routine. Cleverly, shelf space was reserved for seasonal goods. The cycle went from home stuff in January, to gardening in the spring, to back to school in summer, to Hallowe’en stuff in September and October, onto Christmas stuff from then onwards. Tough luck if you wanted to buy a bird feeder during winter though.

Woolworths made a name for itself as a place where you could buy bits and bobs. If you wanted to buy something but weren’t sure where to get it, you could pop into Woolies. This meant that people had an affection for Woolworths — it was that useful shop where you could get your bits and pieces.

But it was also deeply dangerous territory for a store to occupy. Customers would sometimes pin all their hopes on being able to find an obscure household object in Woolies — and would become angry if we didn’t sell it. Then, as widespread access to the internet became a reality, you no longer had to search for your obscure items in Woolies. You could just search Google for them instead.

Meanwhile, all too often people wouldn’t know what Woolworths actually did sell. I primarily worked on the stationery department, but before I worked at Woolies I doubt I would have been able to tell you that it sold stationery. I certainly wouldn’t have bought my stationery from there before I started working there. I shopped at Stationery Box or WH Smith for my ringbingers and refill pads instead.

The sheer variety of goods sold by Woolworths also meant that it had multiple rivals on the High Street, each of whom focussed on a niche that they could specialise in. HMV sold a better range of entertainment products. You could go to Dunelm Mill for your household goods. Around half a dozen phone shops surrounded our back door. There were at least two greetings cards shops a stone’s throw away. The Works had some art and craft stuff. Even for toys you could go to Argos. Apparently Wilkinson destroyed Woolies down south. And of course, Woolworths competed with the major supermarkets on almost everything.

It seemed as though Woolworths needed to bring a better focus to its product range. But at the same time, it was difficult to see which departments could be safely ditched. DIY-type stuff could have been a prime candidate, but at the same time there was nowhere else on the high street (certainly on Kirkcaldy High Street) where you could buy that sort of thing. Entertainment could have gone due to poor sales, but it propped up an important arm of the Woolworths business, Entertainment UK.

I thought it would have been a good idea for Woolworths to position itself as a shop for kids and their parents. That would have brought most Woolworths departments — confectionery, kids clothing, toys, even home goods — under a clearer focus. In a way, I think Woolies had already become that store, but it didn’t have the bravery to properly market itself as such.

It is too easy, though, to blame Woolworths’s demise on the eclecticism of its range. Analysts may have bemoaned the way Woolies stocked Monopoly boards under the same roof as screwdrivers. But that doesn’t explain why one of the healthiest stores on the High Street just now is Poundland, which is like a jumble sale in comparison to Woolies. Plus, the thesis is fundamentally incompatible with the never-ending rise of the supermarket.

My next and final post in the series will look at some of the blunders of Woolworths and what life as a Woolies employee was like in the final few months.