Articles | Woolies shares suspended

Thousands of jobs under threat

Published: Wednesday, 26 November 2008, 7:59AM

Thousands of jobs are under threat after high street giant Woolworths went into administration, according to store sources.

The ailing firm, which has 815 stores across the UK and about 30,000 staff, earlier suspended the trading of its shares.

Woolworths was in discussions over the potential sale of its retail outlets and its 40 per cent stake in the 2 Entertain publishing joint venture with BBC Worldwide.

But the company, which has been in business for almost a century, added that both deals are subject to the approval of its banks and said "there can no assurance" that the sales would be completed.

The company confirmed that BBC Worldwide was the potential buyer of its stake in 2 Entertain.

Woolworths added: "Pending the outcome of these discussions and the consequent impact on the company's financial position, the company has requested a suspension of the trading of its shares on the London Stock Exchange."

Meanwhile, the company's biggest shareholder, property entrepreneur Ardeshir Naghshineh who owns a 10.2 per cent stake, had said he was keen to talk to the Woolworths board about a possible alternative proposal to rescue the company.

Woolworths' crisis talks come as furniture company MFI goes into administration. MFI - which has been hit by the housing downturn - employs more than 1,000 people and runs 110 stores across the UK.

John Gorle, national officer of the shopworkers' union Usdaw said the news was "devastating" for the staff.

He said: "We will be seeking urgent talks with the administrators to ensure that our members' future is at the top of their agenda and to understand the proposals for the businesses in the short to medium term.

"Obviously, the ongoing uncertainty surrounding the future of the stores will be of great concern to employees, so we will do everything we can to help communicate the situation to the staff as the situation unfolds."