Woolworths woes continue

August 17, 2008


Troubles come not singly but in battalions. The adage might be applied to Woolworths at present as it faces financial decline, a hostile take-over bid, and a new leader due to arrive next month

In June, [2008] Leaders we deserve reported on the enthusiasm with which Mr Trevor Bish-Jones took his golden handshake and departed the company.

Since then, the company has seen further deterioration in its trading position reported in July

The replacement for Mr Bish-Jones former Focus DIY chief executive Steve Johnson was recently announced as joining the firm in September

But before Mr. Johnson could get his feet under the table, the company faced its latest challenge in the shape of a takeover bid. Which it promptly rejected.

Troubled retailer Woolworths says it has rejected a bid for its network of 815 stores, calling it “unacceptable”.
Woolworths confirmed reports that the boss of the Iceland frozen food chain, Malcolm Walker, had made an offer to buy its retail division.
However, the company’s board said the proposal undervalued its assets and involved a complex restructuring, which was not achievable.

What happens next?

In the various posts on leadership reported here, there have been a number of stories of takeover attempts. The case for takeover is easier to make if the target company is demonstrating leadership problems together with financial difficulties.

The arrival of a new leader may help signal a fresh approach. It worked magnificently in the famous case of Stuart Rose arriving at Marks and Spencer to thwart to attention of predator Philip Green.

Will the arrival of Steve Johnson increase the survival chances for Woolworths in its present form? In the M&S case, Rose quickly helped put an imaginative new strategy in place.

Maybe Mr. Johnson will also provide creative leadership at a time of Corporate crisis. The initial statement from Woolworths (according to the BBC) suggests that such a possibility is the hope of the organization.

Mr Johnson said he would be focusing on “value creation for all stakeholders” when he joins the firm in September.

The retailer said it was “delighted” that Mr Johnson was joining the company.
“His strong background in both retail and consultancy, together with his particular experience in achieving a turnaround at Focus, he brings the strategic and operational skills that the Group needs to help it move to the next stage of its development.”

But what will happen between now and September? Will the battalion of its woes be successfully kept at bay?