Woolworths

In 1982 Paternoster Stores (the forerunner to present day Kingfisher) acquired the entire Woolworths business in the UK. Following the acquisition, the new management implemented a strategy in which merchandise was concentrated on selective ranges. These remain at the core of the Woolworths product range today.

During the 1980s, management rationalised the offer further into clearly defined categories: entertainment, home, children's (toys and clothing) and confectionery. This enabled development of the individual product ranges through branded, own-brand and exclusive merchandise such as Ladybird clothing and Chad Valley toys.

In the late 1990s, the Woolworths brand extended into

Woolworths Group plc began trading as a listed company on the London Stock Exchange in August 2001 after its de-merger from Kingfisher plc.

Highlights from statements accompanying the most recent interim report (for the six months to August 2002) reveal the Woolworths is optimistic about recovery. Much of the first year since the demerger has been spent stabilising the business, clearing over £100m of excess stock, paying off the debt inherited at the demerger, taking action on loss making businesses and formats and strengthening the management. The six-month period saw better performance from the entertainment businesses (up 26%) and big W stores (like for like sales growth of 2.4%). A detailed review of the formats has resulted in the end of the Woolworths General format. The strategy is driven by a simple plan: to simplify the business (focus on big W and Mainchain formats); to strengthen the infrastructure (by improving stock management, supply chain and customer services); to rebuild core competences (by centralising buying, reducing suppliers, developing better ranges and increased use of own brand product, creation of own buying offices in Hong Kong) and developing a clear proposition, i.e. a sufficiently detailed retail offer that is clearly understood by customers.

Woolworths buyers work in different business units. Jo Hall is strategic head of the business unit most important for licensing: toys, stationery and events. Jo gave us some insight into the importance of licensed products for the retailer. 'Licensed products at Woolworths are an extremely important part of our customer offer. It's a great home for them because we can offer such a diverse range of merchandise from DVDs, kids' clothing, toys, stationery. In other words, everything for kids under one roof.'

The most successful properties for Woolworths are characterised by careful management of the licence, design co-ordination, integrated marketing plans and inherent good value of product.

Jo's role at Woolworths concerns strategic co-ordination and implementation across all business functions. Her aim is to deliver the best representation and execution on the High Street. The different buyers find out about what's likely to be popular by a process of constant co-ordination and communication.

Jo explains there is no particular principle which guides Woolworths about which properties to choose. Rather, it takes a balanced and comprehensive assortment of properties.

Having an exclusive is very important. Woolworths likes to offer exclusive products and deals for customers and innovation and exclusivity contribute to the sort of highly apppealing customer offer which Woolworths strives to provide. In particular, promotions are very successful.

We asked Jo what the most important things are for the licensing community to understand about working with Woolworths. 'Understanding the Woolworths processes is key; the timeframes, the strength's and weaknesses.'