Woolworth's Stayin' Alive?

Woolworth's, the nearly forgotten five-and-dime chain, still hangs on by a thread in a British company named Kingfisher P.L.C. But the future looks dim for the discount store, since Kingfisher announced it would split itself into two businesses.

The division between home-improvement and electronics stores, and general merchandise businesses (made up of Woolworth's and a drug-store chain), is intended to counter-attack the latter's recent profit plunge.

According to Kingfisher ceo, Geoffrey Mulcahy, the split will kindle international expansion in both businesses. Others disagree, viewing the breakup as another step toward Woolworth's demise. Michael Godliman, a director with the British consulting group, Verdict Research, suggests shareholders invest in the home-improvement and electronics business, explaining, “That's the bit that's doing very well.”

Woolworth's format is largely considered archaic in the shadow of giant discount stores like Wal-Mart, but has hung on in Britain, since only recently has the discount trend begun to gain momentum in that part of the world. Wal-Mart and Matalan (a comparable chain) are moving in on British territory today, and will most likely impact Woolworth's for the worse.