Woolworths 'set to sell off music chain'
Woolworths could announce the sale of its music and video chain as soon as tomorrow, it was reported today.
A consortium led by corporate finance specialist Argyll Partners is reportedly set to buy loss-making business MVC, which sells CDs, DVDs, video games and digital music downloads.
Woolies put the chain up for sale in March after deciding it needed “substantial” investment. At the time, it said it was closing 14 stores to leave it with its current network of 67.
According to the Financial Mail, Stockport-based independent chain Music Zone was close to agreeing the terms of a takeover of MVC in June, but the negotiations failed.
In its last financial year, Woolworths said MVC’s performance improved. Despite like-for-like sales falling 4.8%, losses narrowed “substantially” due to better margins and tighter cost controls.
The group said last week that tough conditions on the high street had continued to take their toll on the wider business, with same-store sales at its core Woolworths chain 4.4% lower in the 24 weeks to July 16.
It said the retail climate had remained difficult and that it was continuing to take action to improve the business by keeping stock and costs under control.
Woolies has enjoyed a revival under chief executive Trevor Bish-Jones, lifting 2004 profits by 5% to £73.1m (€106m), although this has since been offset by the disappointing sales performance so far this year.
The group is due to announce interim results for the 26 weeks to July 30 on September 21.
