Archive for November, 2008

British retailer Woolworths says close to bankruptcy (AFP)

Thursday, November 27th, 2008 | Finance News

British clothes-to-confectionery retail group Woolworths said on Thursday that it was close to bankruptcy as it appointed independent admistrators to try and save the business and its 25,000 employees.

The 100-year-old company, with a chain of shops selling toys, stationery, magazines and novels, said it had appointed financial services group Deloitte as administrators.

Woolworths' parent Woolworths Group added that its supplier of DVDs and books to supermarkets, Entertainment UK, had also been placed under administration.

"The board of Woolworths group plc announces that discussions relating to the potential sale of its retail business have now ended," said a statement issued on Thursday.

"Following, and as a consequence of the termination of those discussions, the boards of Woolworths plc and Entertainment UK Ltd have concluded that there is no longer any prospect of those businesses being able to operate as a going concern.

"Accordingly, the boards of both companies last night (late Wednesday) resolved to file petitions for administration in the High Court."

Woolworths Group added that it was not in administration.

British furniture chain MFI, which has more than 1,000 staff in more than 100 stores, had on Wednesday also called in the administrators.

Woolworths and MFI have been struggling for a number of years amid fierce competition, while a looming British recession appears to have been the final nail in the coffin for the pair.


Panasonic slashes profit forecast (Reuters)

Thursday, November 27th, 2008 | Finance News

TOKYO (Reuters) –
Panasonic Corp (6752.T) cut its annual net profit forecast by 90 percent and announced plans to restructure as the global financial crisis begins to hurt top Japanese electronics makers.

Panasonic, the world's No.1 plasma TV maker, said it would book about $1.4 billion in restructuring costs to respond to a downturn that has already forced rivals such as Sony Corp (6758.T) and Sharp Corp (6753.T) to cut their outlooks.

The new forecast, which is far below market expectations, surprised investors who had seen Panasonic as relatively well positioned to cope with the global economic slowdown thanks to an efficient production structure and diversified business portfolio.

"If Panasonic has to cut its outlook this much, it is not very difficult to guess how tough things are for other electronics makers as well," said a fund manager at a Japanese asset management firm.

Panasonic now expects its net profit to trickle in at 30 billion yen ($315 million) in the year ending in March 2009, down from its previous forecast of 310 billion yen and from a 281.88 billion yen profit a year earlier.

The new forecast falls well short of the consensus of 256 billion yen in a poll of 19 analysts by Reuters Estimates.

The company warned it may miss its target to sell 11 million flat TVs this business year, underscoring an increasingly gloomy outlook for consumer demand as Japan and other major economies sink into recession.

But Panasonic will also be hit by 60 billion yen in appraisal losses on its shareholdings and 130 billion yen in restructuring charges as it closes and sells unprofitable operations.

The company cut its operating profit forecast 39 percent to 340 billion yen for the year to March and lowered its sales outlook by 7.6 percent to 8.5 trillion yen.

The revisions were expected after a source familiar with the matter said earlier on Thursday the maker of Viera flat TVs and Lumix digital cameras was likely to cut its annual operating profit forecast by at least 30 percent.

Sony, the maker of Bravia flat TVs, Cyber-shot digital cameras and PlayStation game consoles, last month cut its operating profit forecast 57 percent to 200 billion yen for the year to March.

Sharp also lowered its profit forecasts last month, hurt by sluggish sales of mobile phones in Japan.

Ahead of the announcement, Panasonic shares closed down 4.7 percent at 1,284 yen, underperforming a 2 percent rise in the Nikkei stock market average (.N225).

(Reporting by Kentaro Hamada, Taiga Uranaka, Nathan Layne, Kiyoshi Takenaka; Editing by Hugh Lawson)


South Korea LG Elec says no plan to acquire GE unit (Reuters)

Thursday, November 27th, 2008 | Finance News

SEOUL (Reuters) –
South Korean handset and electronics maker LG Electronics (066570.KS) said that it had no plan to acquire GE's (GE.N) home appliance unit, ending months of speculation it could be one of the main suitors for the business.

"After reviewing possible impacts on our company, we have no plan to take over GE's unit now," LG Electronics said on Thursday in a regulatory filing.

(Reporting by Seo Eun-kyung; Editing by Jonathan Hopfner)