Date: 27 November 2008 20:12:50
So it looks like this maybe the end of the road for Woolworths; not that it should be a great surprise to anyone. The chain has struggled for at least the last 10 years and countless buyouts, reorganisations and rescues have all failed spectactularly. It lost its way, appeared to be inherently old fashioned in outlook and was unable to compete with the might of Tesco, Asda etc.
Yet we also need to add to the list MFI, a company with identical failings over a similar period of time. So too the demise of Revlon's factory in Maesteg, now under another name and identity.
What these businesses have in common is that they were once household names and major brands but have been in their deaththrows for a number of years. The hope is that they will be saved again at the eleventh hour by another white knight, The problem is that in today's financial world there are very few white knights around.
They also suffer from the venture capital disease. They have been bought and sold some many times that they have little of value left. Eeryone has made their money, turned the business around(?) and moved on to better things. Each time they find another sucker to pick up the pieces; so the financial merrygoround continues until the music stops. Who lose? The workers whose only fault is that they are at the bottom of the foodchain living off the scraps.
The question is what should be done? Should we be a true free market society and allow them to die gracefully? Yes, we will see the loss of around 30000 jobs lost but should we spend good money keeping them afloat for nostalgia's sake alone? How often have you shopped in Woolies, MFI or bought Revlon products? See we have all contributed to their fall.
Yet we have the image of those profligate wasters in the automotive industry going cap in hand to almost every government seeking bailouts to stave off their bloated debts. We've already done it for the banks so why not them as well? they say. So if them, what about Woolies etc? Where would we stop?
What we should learn from this is that we cannot trust politicians, bankers, financiers, directors or "experts". They have all contributed to the current mess through their own hubris. The Masters of the Universe are now the minnows that are living comfortable lives while the rest suffer. They have all encouraged us to spend money we don't have by spending money that they didn't have but got from us.
Remember that it is our retirement funds that have been lost. Our taxes that will pay to put things right. The lifelivhoods of us all that will be risked again next time. Do NOT be taken in by the illusion that the politicians, corporations and bankers will learn from this. They'll all be putting their noses back in the troughs very soon.