11/27/2008 1:43:00 PM
Mobile companies not at risk from Woolworths collapse
None of the major distributors and networks are owed large sums of money from recently collapsed Woolworths, as virtually all of its suppliers stopped offering stock on credit.
Data Select, Comment RS and 20:20 Mobile were Woolworths’ main distributors and all of the networks provided the retailer with stock.
Credit insurance firms Coface, Atradius and Euler Hermes all stopped offering insurance on credit at the start of November, leaving suppliers to either face risking non-payment after providing stock or demand cash up front.
Concerns surrounding Woolworths’ ability to pay suppliers is thought to be one of the final factors that left the retail business without stock, leading to it being unable to trade and ultimately fall into administration.
James Browning, CEO of 20:20 Mobile, and George McPherson, CEO of Data Select, both said they were not at risk.
Virgin Mobile and Orange, two of the main networks at Woolworths, also said they started pulling back any risk they had with the retailer over the last few months, but both said it would be a shame if a solution could not be found for the retailer to continue.
All of the mobile operators have previously viewed Woolworths as an important sales channel in reaching a specific type of customer (typically teenage girls) that other retailers find it hard to attract.