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Retail

Woolworths collapse to cost Ubisoft EUR 1.5m

Thu 11 Dec 2008 10:34am GMT / 5:34am EST / 2:34am PST
Retail

But retailer had paid EUR 5.7 million to publisher days before going into administration

French publisher Ubisoft could lose up to EUR 1.5 million due to the collapse of Woolworth and its distribution business EUK.

Chief financial officer Alain Martinez told the UBS Annual Global Media Conference that payment problems with Woolworths follows partners defaulting in other European regions.

"Before the Woolworths incident we had two defaults, one in Germany and one in France, for about EUR 3 million, but since we were covered by about 90 per cent the impact for us should be about EUR 300,000," said Martinez.

"Woolworths is going to be bigger, probably it's going to be between EUR 1.2 and 1.5 million," he revealed.

During a conference call following the release of Ubisoft's first half profits in November, Martinez had commented that the company felt safe with Woolworths, as it had recently received a payment of around EUR 5.7m.

"It was not so funny that when we had the last call I was saying that Woolworths was okay, and then they filed five minutes afterwards," said Martinez of Woolworths going into administration.

"What we can say is that three days before they had paid us GBP 5 million. That's why we felt it was going good because they were respecting their payment terms up to that day."

He added: "We are right now working out with Woolworths on dealing with their administrator."

Reports yesterday suggested that publishers including Nintendo and Microsoft are also likely to lose millions, after administrator Deloitte failed to find a buyer for the retail chain.

Today, Woolworths has begun a closing down sale, with stores expected to shut before the end of the month.

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