Woolworths has only days to complete a deal to sell its retail arm to restructuring specialist Hilco or it will have to call in the administrators, say sources close to the negotiations.
The deadline on its future comes amid more evidence that this Christmas will be one of the worst in recent memory for retailers. High street bellwether John Lewis said yearon-year trading was down 13% last week on consumers’ fears about the economic climate.
For Woolworths, which is labouring under almost £385m of debt, a lack of sales is expected to push the company into administration in the near future unless a deal can be secured.
Over the weekend, Hilco improved the terms of its offer to buy the 840-strong retail chain by increasing the amount of Woolworth’s debt it was prepared take on from £265m to £300m. If Woolworth’s lenders, led by GMAC and Bank of Ireland, accept the deal, it will leave the group with its profitable publishing and distribution business and £85m of debt.