The Rise and Fall of Woolworths
When Woolworths first opened in New York city back in 1879, it was the era's equivalent of today's £1 shop. It became known as a "cheap and cheerful" retailer that sold all kinds of items for just five cents each. In its heyday, it was arguably the most successful retail business in history, creating a retail model which was followed worldwide.
Maybe that is why it came as such a shock in 2008, when the major retail chain FW Woolworth ended up in the hands of the receivers, with 800 stores and 30,000 jobs in the UK affected by its sudden and unexpected demise. Market analysts were left scratching their heads, struggling to explain how a retailer that made record profits of £105.1 million in 1998 collapsed with such speed.
Frank Winfield Woolworth launched the first Woolworth store in Utica, New York on 22nd February 1878 - it was known as Woolworth's Great Five Cent Store. However, it wasn't too popular in this location, so another store of the same name was soon launched in Lancaster, Pennsylvania, on 18th July 1879.
Frank and his brother Charles enjoyed great success with the second store and they pioneered methods of direct purchasing, merchandising, customer services and sales that are still used in the 21st century.
Prior to the opening of Woolworths, retailers had habitually kept their wares behind the counter. Customers would present the shopkeeper with a list of their required purchases. Woolworths began the pioneering practice of putting the merchandise on open shelves that the public could look at and handle themselves, without the aid of a sales assistant.
The Woolworth brothers continued to expand their business, opening more stores throughout the 19th century, until they had their own empire by 1904. Known as the Woolworth Syndicate, there were 596 stores in the US and Canada. In 1912, they became known as the FW Woolworth Company.
Woolworths in the UK
The first UK Woolworths opened in Church Street, Liverpool in November 1909. It was an instant hit, with 6d being the highest price charged for any item in the shop. The newspapers at the time reported that shoppers could buy an "infinite" selection of items.
The company continued to expand rapidly, with a new store being opened every 17 days by the mid-1920s. The arrival of its distinctive red fascia on the high street was widely welcomed by shoppers and local councils alike, who viewed the opening of a Woolworth store as a seal of approval for their town, putting them on the map.
By the 1940s, there were almost 500 Woolworth stores in Britain. Run by William Stephenson - a young freight clerk who had met Frank Woolworth in a Staffordshire pottery - the bright and astute Stephenson became the business founder's protégé and indeed, a wealthy man himself. When Stephenson retired in 1948, the British arm of Woolworths was a massive concern that was floated on the London Stock Exchange, making him one of the richest men in the country.
So, what went wrong?
Business leaders and shoppers alike were left wondering where it all went wrong, after around a century of being a high street institution, Woolworths came to a sad and abrupt end.
In the 1970s, while Woolworths closed an average 15 stores a year, they stressed this was to fund more modern outlets rather than downsizing. In the early 1980s, there were still around 1,000 Woolworths high street shops in the UK. However, the US arm of Woolworths - by this time owned by a rival American retail company - announced it was closing in 1997.
Yet its British counterpart still seemed to be in good health. It became part of the retail giant Kingfisher, who also owned the B&Q chain. However, the credit crunch and the recession impacted heavily on Woolworths and it parted company from Kingfisher in August 2001, when it was floated as a separate company.
Some analysts believe Woolworths was undermined, as its rent bill reportedly increased from £70 million to £160 million. In addition, while Woolworths tweaked its stores depending on their location, the chain was also in competition not only with existing rivals such as Argos but also with new competitors such as Poundland and Wilkinson who were entering the non-food market and attracting the traditional Woolworth customer.
It was reported how Woolworths battled stock shortages and failed to attract a new generation of shoppers, with its stores viewed as unfashionable. The credit crunch speeded up the retail chain's demise and in 2008, it went into administration - an event labelled the "bleakest day in retail history" by some.
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