The company yesterday unveiled a group-wide loss of £59m in the six months to August, down from a £67m loss last year. Woolworths also owns EUK, a books and music distribution business and has a 50/50 joint venture with the BBC - 2Entertain - which produces and distributes DVDs.
The 800-strong Woolworths store chain -traditionally loss-making in the first half as so much of its trade is Christmas-related - made a first half operating loss of £48m, some £17m less than twelve months ago. Some of the improvement was down to lease diposals and accounting changes related to depreciation. The chain also posted like-for-like sales up 0.6% and its margins were ahead by 100 basis points.Chief executive Trevor Bish-Jones said the chain was mothballing some £3m of seasonal products unsold because of the wet summer. But he said the bad weather had helped sales of indoor products and the chain had also been given a boost by launches like the seventh Harry Potter novel and the Nintendo Wii computer game platform. Woolworths own label Ladybird children's clothing and its new Worth It! range of 600 products, ranging from toasters to blank DVDs priced to compete with supermarkets, also sold well. Mr Bish-Jones said Worth It! was now accounting for up to 4% of total sales.
The Big Red Book - Woolworth's answer to the Argos catalogue, launched last autumn - helped boost online sales by 93%. The third edition of the catalogue launches next month.
The EUK business had "a more difficult half", reporting a loss of some £4.5m as a result of "integration costs" after two acquisitions. 2Entertain produced a "strong performance", generating profits of around £7m with the fastest growth coming from the US, where it opened up new sales channels, including Wal-Mart.
Mr Bish-Jones said Christmas could be difficult but predicted that Woolworths would suffer less than some. Its sharesclosed up 0.5p at 20.5p, valuing the business at only £300m.
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