Woolworths profits hit by retail slump
Sweets-to-DVDs retailer Woolworths issued a profit warning yesterday, blaming a marked downturn in trading conditions, as it scrapped plans to sell out of DVD publisher 2 Entertain, sending its shares to a new low.
The 100-year-old group, which last month agreed to part company with chief executive Trevor Bish-Jones, said it planned to rebuild its retail business around its more profitable small and medium sized stores.
But analysts said it faced an uphill struggle.
“Woolworths’ trading statement is dreadful,” said Panmure’s Philip Dorgan. “Any talent thinking about taking the (chief executive) job will doubtless be unimpressed by the board’s strategic review.”
Woolworth’s stock has slumped 80 per cent in value over the past 18 months, hit by growing competition from supermarkets and the internet.
Woolworths, which runs over 800 shops selling items from garden furniture to children’s clothes and toys, said like-for-like sales fell 6.7 per cent in the six weeks to 26 July. Gross maralso fell.
