Restructuring Woolworths Group Plc. - The Attempt that Failed
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Case Code : BSTR323
Case Length : 19 Pages
Period : 2001-2008
Pub Date : 2009
Teaching Note :Not Available
Organization : Woolworths Group Plc.
Industry : Retail
Countries : UK
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
The origin of Woolworths can be traced back to 1909 as the first of the British units of FW Woolworth and Company Limited, based in Pennsylvania, US.
Its founder was Frank Winfield Woolworth who first established the five and ten pence stores in the US (stores where everything cost between 5 and 10 cents) in 1878...
Restructuring at Woolworths
After the demerger, Woolworths launched a program to reduce debt, clear the excess stock, and generate cash for business recovery. The program was planned to be implemented in three phases...
Strengthening the Supply Chain
The strategy relating to strengthening the supply chain and infrastructure involved inculcating in-store discipline, reducing supply chain costs by implementing better systems infrastructure at the company's head office, and ensuring better product availability at its stores to meet the seasonal and regular demand...
Simplifying the Business
Simplifying the business comprised rationalization of the existing four formats under which Woolies stores operated and which the management had perceived as complex and costly...
The Fall Begins
In the fiscal 2005-06, Woolworths' retail business, Woolies, began to feel the impact of the sluggish business environment and the high costs associated with its restructuring program Consequently, Woolies reported a lower net profit of £ 17.1 million as compared to net profit of £ 39.8 million in fiscal 2004-05 (Refer to Exhibit V for the performance highlights of retail segment of Woolworths' Group Plc between fiscal 2004-05 and 2007-08)...