Why did MFI, Woolworths have gone bankrupt?
MFI – their own explanation was a lack of people buying “big ticket” items. The credit crunch has made it harder for people to obtain credit to buy big items and also the economic slowdown means that people have either got less money to spend or the fear of what might happen and job insecurity puts people off making big purchases – we can all make our sofa last a bit longer and re can all wait until things look better before refitting the kitchen. Woolworths – has been a lame duck for ages and had a flawed business model. Shops specialise these days and there is no room for a shop that sells a bit of everything (if you want a cd go to a record shop, toys go to a toy shop etc) – they became outdated and the shops also became scruffy and disorganised. They built up debts and eventually suppliers wanted them to pay up front as they were considered a credit risk. Having to pay for the xmas 2008 stock up front maxed out the debts and the main creditors pulled the plug. Hope this helps! Its
