Two of the biggest retail companies in Britain went bankrupt today.

The news was announced after UK markets closed. Woolworths and MFI shares suspended.
MFI is one of the biggest budget furniture providers.

Woolworths though is iconic of Britain having started up over 100 years ago, survived the Great Depression and was well known throughout the war and since and went on to have store on every main high street in UK. It is one of the most well known UK stores. Despite banks being given £Billions to keep them afloat, banks demanded immediate payment to loans they originally gave MFI, but pulled the plug today.

Apparently there were arrangements to enable a takeover of Woolworths for £1 but banks simply pulled the plug today even though most of the money they demanded up front would have been found by the consortium but banks would not wait for the remainder and simply pulled the plug be banks said no, with the consequent loss of 35,000 jobs overnight (25,000 at Woolworths, 5,000 at Entertainment UK and 5,000 at MFI).

UK government has stressed it wont bailout private companies, even though it’s bailed out the bankers. Banks have been bailed out but today simply pulled the plug on two of UKs biggest retail companies with the immediate loss of thousands of jobs.

815 Woolworth’s stores to close:
http://news.bbc.co.uk/1/hi/business/7751064.stm

110 MFI stores likely to close:
http://news.bbc.co.uk/1/hi/business/7750250.stm

Robert Peston, BBC Business editor’s comments on the shock retail news for UK. He also remarks the Uk government won’t bailout these companies as “government policy is not to prop up lame ducks”:

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/11/woolworth_into_administration.html

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