Woolworths says close to bankruptcy

Retail group Woolworths said on Thursday that it was close to bankruptcy as it appointed independent admistrators to try and save the business and its 25,000 employees.

The 100-year-old company, with a chain of shops selling toys, stationery, magazines and novels, said it had appointed financial services group Deloitte as administrators.

Woolworths' parent Woolworths Group added that its supplier of DVDs and books to supermarkets, Entertainment UK, had also been placed under administration.

"The board of Woolworths group plc announces that discussions relating to the potential sale of its retail business have now ended," said a statement issued on Thursday.

"Following, and as a consequence of the termination of those discussions, the boards of Woolworths plc and Entertainment UK Ltd have concluded that there is no longer any prospect of those businesses being able to operate as a going concern.

"Accordingly, the boards of both companies last night (late Wednesday) resolved to file petitions for administration in the High Court."

Woolworths Group added that it was not in administration.

Furniture chain MFI, which has more than 1,000 staff in more than 100 stores, had on Wednesday also called in the administrators.

Woolworths and MFI have been struggling for a number of years amid fierce competition, while a looming recession in Britain appears to have been the final nail in the coffin for the pair.

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