Woolco

Woolco

Company type	Subsidiary of F.W. Woolworth
Traded as	NYSE
Industry	Discount department store
Founded	1962 (Columbus, Ohio, United States)
Defunct	1983 (United States) 1986 (UK) 1994 (Canada)
Fate	Rebranded as Woolworth in United States and UK Canadian chain later acquired by Walmart Canada
Successor	Woolworth and Walmart Canada
Key people	F.W. Woolworth (CEO/Chairman) Charles Woolworth (President)
Products	Clothing, footwear, bedding, furniture, jewelry, beauty products, electronics, toys, housewares
Parent	F. W. Woolworth Company

Woolco was an American-based discount retail chain. It was founded in 1962 in the city of Columbus, Ohio by the F.W. Woolworth Company. It was a full-line discount department store unlike the five-and-dime Woolworth stores which operated at the time. At its peak, Woolco had hundreds of stores in the US, as well as in Canada and the United Kingdom. While the American stores were closed in early 1983, the chain remained active in Canada until it was sold in 1994 to rival Walmart which was looking to enter the Canadian market. All of the former UK Woolco stores were sold by Kingfisher, who had bought the UK Woolworth business, to Gateway who subsequently sold them to Asda.

History

Creation

The creation of Woolco coincided with the expansion of suburbia. Woolworth's flagship stores were still doing well, but the company wanted to tap into the growing discount department store market without diluting its dominant position in the variety store business. The first Woolco store was located in Columbus, Ohio. By 1966, there were 18 in the United States and nine in Canada. Plans were for 30 stores to be added per year. This led to tremendous growth as over 300 Woolco stores opened up across North America by the mid-1970s. Some stores were converted from regular Woolworth stores, including the location at Westland Mall in West Burlington, Iowa.

The company experimented with both Woolco and a more downscale merchandising unit called Worth Mart in the mid-1960s. Woolco was the eventual winner with customers, and the Worth Mart stores were folded into Woolco's store base by the 1970s.

At the outset, Woolco stores were considered by the company to be "promotional department stores," with expanded product lines and other amenities not typically found at namesake Woolworth stores.

Many locations contained Red Grille restaurants, a cafeteria-style outlet, and the food areas sold popcorn, real milkshakes, and other food.

A number of Woolco stores were opened in the United Kingdom during the same period, one of which in Bournemouth was the 'largest store on one floor' in Britain.

Demise

The typical Woolco store was well over 100,000 square feet (9,300 m²), which was quite large for a discount store of that era. Many of its departments (e.g., shoes and jewelry) were leased to third-party operators, a common practice among early discounters.

Starting in the late 1970s, Woolworth enacted a cost-saving plan for Woolco that included a reduction in floor space for the largest locations, the elimination of most leased departments and an expansion into smaller markets with stores as small as 60,000 square feet (5,600 m²). During this period, the excess space in some larger Woolco stores went to a Woolworth-owned off-price clothing retailer called J. Brannam, which was short for "Just Brand Names"

By 1979, it became clear that the earlier cost-saving plan would not be enough to save Woolco from failure, so Woolworth combined the discount store operating unit with its variety stores and began to close stores in unprofitable markets including Chicago.

Closure

Woolco ceased operations in the United States in January 1983, with all 336 stores closing. Woolco's inventory was valued at approximately $1 billion, making Woolco's liquidation the largest in United States history at the time. However, the Canadian division of approximately 120 stores remained open. In 1982, the British Woolco stores were converted into regular Woolworth stores and were spun off along with the British Woolworths chain in the same year. Those larger stores were subsequently sold by Kingfisher plc to Gateway in 1986 and then Gateway sold the stores again, this time to Asda in 1988. In 1990, 26 Woolworth stores in Canada were converted to Woolco because of their larger size. In 1994, in order to repay the $1.7 billion debt incurred from international specialty store expansion, the Woolworth Corporation sold most of the Woolco Canada stores to Walmart. Wal-Mart did not acquire the Woolco stores that were either unionized or had downtown locations. Some Woolco stores were sold and re-opened as Zellers stores; when Zellers liquidated, some of those stores were later sold to Target Canada, which ceased operations themselves in 2015 following bankruptcy. In the UK, Kingfisher plc attempted to revive the style of Woolco with the Big W chain in 1999, which was successful, but suffered when Woolworths split into its own company in 2001, and in 2004, Woolworths Group PLC scrapped the Big W chain and sold some of the stores to supermarket chains Asda and Tesco. Woolworths rebranded the Big W stores they kept under their own name and they remained until Woolworths's administration in 2008.

Canada

In a smaller, less crowded retailing market, Woolco had a bigger impact in Canada than it did in the US. There were 160 stores in Canada at dissolution, the chain having survived another 12 years in Canada after the US closure before disappearing after being bought out by Wal-Mart Canada. They were so well known that Canadian songwriters Leon Dubinsky and Max MacDonald even wrote a popular song called "Working at the Woolco Manager Trainee Blues" (1977). During the 1970s and 1980s, the Canadian stores were well known for their monthly "$1.44 Days", wherein numerous items were sold at a price of $1.44 CAD. Competitors Woodward's & Eaton's ran "$1.49 Days" usually the first Monday each month. Most stores also contained an automotive and tire service department. Most stores in Canada had an in-store restaurant section. These restaurants were named the Red Grille or the Strawberry Street Cafeteria.