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Suppliers of iconic toys such as Bob the Builder, Bratz and Transformers are chasing Woolworths for millions of pounds after the retailer went into administration last week with debts of 385 million ($1.07 billion).
The suppliers and manufacturers demanding compensation include HIT Entertainment, which owns the rights to Bob the Builder; Golden Bear Products, which owns Noddy; Hasbro, the US giant behind Transformers, MGA Entertainment, which makes Bratz dolls; and Lego.
All these toys were still being sold at a branch of Woolworths in north London this week, suggesting that suppliers had continued to deliver to the pick'n'mix retailer as it hit the buffers. Some suppliers are owed more than 1 million each.
The revelation illustrates the complexity and scale of the process facing the administrator, Deloitte, and means that toy suppliers could make some of the largest claims among Woolworths' creditors. VTech Electronics, a supplier of such pre-school learning products as the Sort and Soar Rocket, is another company embroiled in a compensation battle with Woolworths.
Character Group, which supplies Scooby-Doo, Doctor Who and Peppa Pig toys, is owed about 1 million and sent a letter to the retailer last week. A spokeswoman said: "On some products, Character Group still has retention of title or ownership of the products, which means they can get the product back."
However, a battle between the two sides is likely and it is unclear if Character Group will get any products back. It is understood that it significantly altered its terms with Woolworths in September, when credit insurers withdrew insurance cover for toy suppliers to provide products to the retailer.
Character Group's offices in Asia successfully secured payment from Woolworths for the delivery of some products to the region from September. It also achieved a reduction in Woolworths' payment terms from 60 to 30 days for different products that Character Group ships directly to Woolworths' warehouses in the UK.
Suppliers are now looking enviously at Mattel, the world's largest toy maker, which stopped delivering toys to Woolworths in September, when Britain's leading credit insurers, Euler Hermes, Coface and Atradius, stopped offering insurance cover.
Woolworths' retail division and its CD, DVD and computer games distribution business, Entertainment UK, went into administration last week. Deloitte is trying to sell the two businesses as going concerns and said it had received substantial interest in both. Theo Paphitis, the retail entrepreneur who appears in the BBC Dragons' Den series, and Ardeshir Naghshineh, the biggest shareholder in Woolworths, are still in the frame to buy a slimmed-down version of the chain, keeping up to 400 of the most profitable stores.
The property specialist CBRE is working on the sale of the stores, and potential buyers this week had to register their interest in taking on various numbers of the shops. It is understood that CBRE has received approaches from rival retailers keen to buy "packages" of stores ranging from two to 100.
The Woolworths Group's publishing business 2 Entertain, a joint venture with BBC Worldwide, was not initially part of last week's administration. However, speculation is mounting that Woolworths Group could be put into administration within days. The BBC would then have to negotiate with Deloitte about buying Woolworths' 40 per cent stake in 2 Entertain. 'ent
- INDEPENDENT
