By Matthew Legg Business editor

Published at 11:23, Friday, 28 November 2008

STAFF at west Cumbria’s three Woolworths stores are facing a bleak Christmas after the collapse of the 99-year-old High Street giant.

End of the line: Woolworths on Pow Street, Workington. The 99-year-old company went into administration this week after losses of £100m to August

About 40 workers at shops in Workington, Whitehaven and Maryport face being thrown out of work in the New Year after the troubled retailer slumped into administration.

Across Cumbria, an estimated 100 people could face redundancy.

Administrators Deloitte have vowed to keep the stores open past Christmas and employees will be paid, but the outlook is dismal for the company which is labouring under a mountain of debt.

Store staff have been instructed not to talk to the press, but Woolworths confirmed all of its west Cumbrian stores, including its branches at Pow Street, Workington, King Street, Whitehaven, and Senhouse Street, Maryport, are open as usual.

Woolworths was placed into administration after a rescue plan drawn up by its board was rejected by its financial backers.

Deloitte said it had received interest from a number of parties for both the retail arm and the firm’s E.UK wholesaling operation.

James Cartmell, the Cumbrian assistant director of Brewin Dolphin investment management, said: “Over recent years Woolworths has struggled to maintain sales as its tired-looking shops came under pressure from a raft of cheaper out-of-town, more specialist operators.

“The group tried to refocus on its wholesale and publishing business, carrying out a couple of purchases during the year to February 2007.

“However, this significantly increased the company’s level of debt at a time when its retail sales were in decline. The company’s trading performance did pick up for a while but not enough to significantly reduce the company’s debt burden.

“Recent trading across the group has remained poor.

“As the credit crunch continued to bite, Woolworths found the cost of insuring its credit line more and more expensive. Eventually, suppliers started to request cash up front for goods, leaving the company with insufficient cashflow to service its debt, forcing the management to place the company into administration.”

Woolworths made pre-tax losses of almost £100m during the six months to the beginning of August. The firm operates 813 stores and employs 30,000 staff.

John Gorle, of the shopworkers’ union Usdaw, said: “This is devastating news.

“Many of the staff have served the company for many years and are extremely dedicated and loyal and we will be doing everything we can to help them through this difficult time.”

MLegg@cngroup.co.uk

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