Back to basics the solution

The problems experienced by Woolworths as outlined in “Leaner returns from a Woolies spread so thin” (January 21) prompt the questioning of both the motives and the wisdom of its decisions.

Many big companies have struggled to show decent returns when they expanded their operations into different continents, be it Europe, the US or Australasia, most ending in failure.

As far as motive is concerned, my view is that this is selfishly based on the fact that the directors are paid their emoluments in different countries, thereby hedging their income, as well as benefiting from travel and other perks.

In terms of decision-making, expansion into a country such as Australia with a time zone ahead by almost a full trading day must create communication problems.

Even the US and Canada, with just a four-hour difference between east and west, have their fair share of logistical challenges.

It’s no wonder that South

African companies that have expanded north into Africa where there are burgeoning populations are reporting good growth.

Another questionable decision is the one to drop the Woolworths name as a brand in its textile division, replacing it with David Jones — unknown, I would hazard, to at least 75% of Woolworths’s customers.

The Woolworths name took from the 1930s to develop, starting initially with house brands Princess and Servus and then dropped in favour of the company’s name when Marks & Spencer changed in 2000 from its house brand St Michael to its company name.

Last week, we heard of

Woolworths writing down R7-billion of David Jones’s value.

I suggest an old Woolies adage of “back to basics”.

Leon Slutzkin, by e-mail