Ian King, Deputy Business Editor and Michael Herman
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One of the biggest suppliers to Woolworths emerged last night as a casualty of
the high street giant’s collapse.
Zetar, the AIM-listed confectionery and snack foods group, is set to lose £1
million as a result of the retailer going into administration. Woolworths
was the fifth-biggest customer of Zetar’s confectionery business.
David O’Brien, an analyst with Altium Securities, Zetar’s house broker, said:
“The decision to place Woolworths into administration has negative
implications for Zetar. Christmas deliveries were completed some time ago
and, with no credit insurance available for suppliers to the retailer, we
estimate that this could cost Zetar up to £1 million of revenue.”
Woolworths is understood to account for 3 per cent of total sales at Zetar,
whose shares were unchanged last night at 177½p, valuing the group at £20.4
million. Zetar is also a leading supplier of Easter eggs to Woolworths, but
the company is already understood to have preparations under way to shift
stock to other customers.
The news came as Metrodome, the AIM-listed film and television distributor,
gave warning that it risked losing £320,000 that it is owed by Woolworths.
Metrodome said that Entertainment UK (EUK) – the music, books and video game
distribution business owned by Woolworths – was one of its largest
customers. EUK was placed into administration on Thursday alongside
Woolworths’ main retail business. It added: “The board estimates that EUK
owes the company £320,000. The directors are unsure as to the recoverability
of this sum and are seeking clarification.”
Shares in Metrodome fell ½p to 1¼p after the news, valuing the company at just
over £1.5 million.
Meanwhile, as Deloitte, Woolworths’ administrator, continued to sift through
offers for the business, it emerged that the accounting firm could be
earning fees of up to £22,000 an hour. AsThe Timesreported
yesterday, Deloitte has received a number of approaches from would-be
buyers, both for the 813-store retail chain and for EUK.
Tesco and Waitrose, which have both bought leases from Woolworths this year,
and Sainsbury’s are all said to be interested in buying some of the
stores. HMV, Boots and WH Smith are also thought to have expressed interest.
Iceland, which this year tried to buy the Woolworths store chain, said that it
would not be bidding again for the whole business. It is now interested only
in buying some of the stores.
Malcolm Walker, Iceland’s chief executive, said: “To run Woolies as Woolies,
which is what we wanted to do, is now a lost opportunity.”
In a fresh blow for Woolworths, it has been stripped of its right to sell
National Lottery tickets by Camelot, the lottery operator. The retailer sold
tickets in about 500 of its 800 stores, which will also no longer be able to
process prize claims.
Elsewhere, Bertrams, the book distributor bought by Woolworths last year,
insisted that it was business as usual. The company, which employs 400
people in Norwich and 200 in Leeds, insisted that it had always sat outside
the Woolworths Group and the group’s financing facilities and was continuing
to trade as a going concern and outside insolvency.
Michael Neil, the managing director, said: “Bertram’s management has been in
contact with Deloitte, which has confirmed its intention that Bertrams is to
continue to operate as a going concern until a new owner for the group is
found. This is very good news and accordingly for Bertram’s staff, suppliers
and customers.”
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