With over 320 outlets and some 11,000 employees in Germany and Austria, Woolworth was one of Central Europe's biggest retailers. But now the company may be having a going-out-of-business sale.
This could be the end for the iconic brand in Germany
A court in the western German city of Frankfurt said on Tuesday that the discounter had been put under administration. The court said that Ottmar Hermann -- a lawyer with significant high-profile bankruptcy experience -- had been put in charge of the company for the initial proceedings.
Woolworth gave no reasons for why it was filing for bankruptcy protection. But a court spokesman told AFP news agency that the company said it had liquidity problems and could not guarantee it would be able to pay its creditors.
Woolworth, known in Germany without the "s" familiar in English-speaking countries, has been in business since 1926. Woolworth Germany has been owned since late 2007 by the British investment group Argyll Partners. The company installed a new CEO in early March, but he lasted only four weeks on the job.
German development part of a trend
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The original Woolworth's in the United States was, as late as 1979, the world's largest department-store chain, but it went out of business in 1997.
Woolworth's brands in other countries continued to operate independently but encountered increasing difficulties. Woolworth's in Britain, for example, went bust in January of this year, costing some 27,000 people their jobs.
A number of high profile companies owned by investment groups -- including toy-train maker Maerklin, department store chain Hertie and auto-parts manufacturer Edscha -- have filed for bankruptcy in recent months.
The court spokesman stressed that Woolworth was at an "early stage" of bankruptcy. But the news that the iconic brand has filed for insolvency is sure to fuel fears that it is about to become the latest casualty of the global financial and economic crisis.