Woolworths (South Africa)

Woolworths Holdings Limited

Type	Corporation
Industry	Retailing
Founded	1931
Founder	Max Sonnenberg
Headquarters	Cape Town, South Africa
Area served	South Africa Australia
Key people	Ian Moir (CEO) Simon Susman (Non-executive chairman)
Products	Clothing, footwear, accessories, groceries, beauty products, homeware and financial services.
Revenue	R35.399 Billion (2013)[1]
Operating income	R3.469 Billion (2013)[1]
Net income	R2.638 Billion (2013)[1]
Number of employees	18,563 (South Africa only)
Divisions	Woolworths (Proprietary) Limited Country Road (Australia) Woolworths Financial Services
Website	www.woolworthsholdings.co.za www.woolworths.co.za

Woolworths branch in Somerset Mall, showing the current branding.

Woolworths food store in Johannesburg, showing the old branding.

Woolworths Holdings Limited (JSE: WHL) is a South African chain of retail stores and one of the largest in the country, modeled on Marks & Spencer of the United Kingdom.^[2] This relationship with Britain's Marks and Spencer was formed after the Second World War, which led to the retailer buying all of the unissued share capital of Woolworths in 1947. These shares were later sold, but close ties still remain.^[3] The first Woolworths store opened in The Old Royal Hotel in Cape Town in October 1931. It was founded by Max Sonnenberg assisted by his son Richard and Fred Kossuth.

The Woolworths brand incorporates a series of food stores, some of which are attached to department stores, while others stand alone or are attached to Engen petrol stations in prosperous urban areas. Some branches include an in-store restaurant, branded as "Cafe W". Woolworths goods are sold at 149 corporate stores, 51 international franchise stores throughout the rest of Africa and the Middle East and 69 South African franchise stores nationwide. Woolworths sells clothing and accessory items under a number of premium brands, namely Country Road, Witchery, Mimco and Trenery.

The chain was named after the United States chain F. W. Woolworth Company but, because of the contemporary trademark laws, the name was legally used without permission. No financial connection ever existed between the companies. Similarly, Woolworths Holdings Limited is not to be confused with Woolworths Limited, an Australian retail company.

History

Founded by Max Sonnenberg and his son Richard, Woolworths South Africa first opened its doors on 30 October 1931 in Plein Street Cape Town, in what had been the stately dining room of the famous Royal Hotel. While Sonnenberg had no affiliation with Woolworths in Europe, North America or Australia, his plan was to develop a chain of stores based on Woolworths Australasia Ltd.

A pivotal point in Woolworths' history came after World War II, when the company established its relationship with Marks & Spencer (M&S) of London. Sonnenberg and Sir Simon Marks, son of the M&S founder, became good friends which led to M&S buying all unissued share capital of Woolworths in 1947. Later, David Susman, Woolworths' Managing Director, married Anne Laski, Lord Marks' niece. David Susman became a non-executive director of M&S, a position he held for nearly 30 years. Although M&S ultimately sold its shares of Woolworths, the two companies maintained close personal ties as well as a formal technology agreement.

Woolworths merged with Truworths in 1981 to form the Wooltru Group (JSE:WLO). Over a twenty-year relationship the company underwent much change and transformation that significantly improved sales and profits, before it was partially unbundled from the group in 1997. In 1998, the company bought a controlling interest in Australian clothing retailer Country Road.^[3] Woolworths became fully independent again in 2001.^[3]

Simon Susman, David's son, became Chief Executive of Woolworths in 2000.^[4] David Susman died on 11 May 2010 at the age of 84. Simon Susman resigned from his post as CEO at the end of 2010.^[4]

Stores

Woolworths operated through both corporate and franchise stores throughout South Africa and neighbouring countries. Various store formats include full-line stores, food stand-alone stores, food and homeware lifestyle stores, stores offering textiles (clothing, footwear and homeware). Only a selection of merchandise is also available online. Cafes offering organic teas and coffees as well as light meals are situated at some larger stores, while several stores also offer a tapas bar style restaurant.^[5]

Controversy

Christian magazines

In October 2010, Woolworths came under fire as they opted to remove Christian magazines from their shelves and discontinue their sale. This was met with a huge outcry from the Christian community, many voicing that they would boycott the chain store.^[6] Their Facebook fan page was flooded with opinion, both positive and negative. Woolworths maintained it was strictly a business decision, with CEO Simon Susman attributing their decision with the diminishing number of sales for these magazines; "We are currently reviewing all magazines sold by Woolworths. We will continue to remove magazines from our shelves that aren't popular with clients. We aim not to offend any community by this policy" said Susman regarding the decision.^[6] However, Woolworths vowed to put the five Christian magazines back on its shelves, following a public outcry over the withdrawal of the titles.^[7]

Soft drink imitation

In early 2012 the South African Advertising Standards Authority ruled that Woolworths’ vintage cold drink range was an imitation of Frankie’s Soft Drinks range. It was ruled that Woolworths intentionally copied the phrase “Good Old Fashioned Soft Drinks” to promote its own line of beverages thereby infringing on the rights of Frankie's Soft Drinks. Woolworths agreed to remove the range immediately.^[8] After the event Woolworths South Africa's CEO Ian Moir publicly stated that “Public opinion is so much against us and, whether we’re right or whether we’re wrong, customer opinion is against us."^[9]

Affirmative action

In September 2012 Woolworths was accused of racism by some groups^[10] for allegedly discriminating against white job applicants and staff. The accusations followed after claims that the retailer's advertising on their career site said its jobs are only open to "African, Coloured and Indian" candidates.^[11] Shortly after the incident, Woolworths changed the advert text to say "In accordance with Woolworths' Employment Equity approach, preference will be given to candidates from designated groups".^[10]

Plagiarism

In October 2013 rumours of plagiarism surfaced when Euodia Roets, a South African artist, accused Woolworths of using her designs that were kept as sample after contract negations which failed.^[12] In her article Euodia Roets shows illustrative images of her design and a cushion on which a strikingly similar design was used. Woolworths denied these allegations on their website.^[13] In her allegations Euodia Roets also claimed "If that text is in fact from Wikipedia, Wiki requires attribution on all commercial use of their text. You’d be correct in assuming Woolies did no such thing.". The text used on the design is an exact match of portions of text lifted from Wikipedia's Hummingbird article, without attribution, in violation of its Creative Commons License. When pressed on the matter, the official Woolworths South Africa Twitter account opined that "We've checked with our lawyer; Wikipedia does not own the content."^[14]

See also

• List of Woolworth divisions and namesakes

References