British entrepreneur Theo Paphitis said on Thursday he had pulled out of the running to buy Woolworths' sweets-to-DVDs retail business, but talks between the administrators, Deloitte, and other suitors are continuing.
"It is with disappointment that I confirm that we could not reach a deal," Paphitis, famous for his role on BBC Television's Dragons' Den, said in a statement.
"My vision was that we could retain the Woolworths brand name through purchasing a large share of the existing retail business … Unfortunately, the constituent parts of Woolworths are more valuable than the whole," he said.
Paphitis noted that the location of many of Woolworths' 815 stores made them attractive for many larger format retailers such as supermarket chains.
Last week Woolworths Group Plc became Britain's most high-profile victim of the consumer slowdown so far when its retail business and Entertainment UK (EUK) wholesale distribution operation were placed into administration.
Deloitte partner Neville Kahn said in a statement on Thursday that the firm was continuing to hold talks with "a number of parties" interested in buying Woolworths' retail business and EUK as going concerns.
He said the suitors included "a number of new parties which have approached us in the last few days."
"At the same time, we have received a substantial number of bids from parties interested in the Woolworths properties and have gone under offer on a large number of stores," added Kahn.
Possible bidders include Iranian property magnate Ardeshir Naghshineh, who owns 10 percent of the retailer's equity, and a management buyout led by Tony Page, who currently runs Woolworths' stores.
Wilkinsons, the 312-store British variety store retailer, confirmed it was interested in purchasing some stores.
"We have made an initial approach to the administrators for what we describe as information gathering purposes. As soon as we have that we'll be able to determine the suitability of each site for Wilkinsons. But it's far too early to say we'll take up any particular site at this stage," said a spokesman.
Most of Britain's supermarket groups have signalled they would only be interested in a handful of stores.
Tesco, Britain's biggest supermarket group, which agreed to buy up to nine Woolworths stores in October, told Reuters on Tuesday it might bid for individual sites, but that it did not envisage a large acquisition.
Waitrose, which bought four Woolworths sites in June, told Reuters last week it was unlikely to buy any more.
Industry sources said J. Sainsbury, which is expanding its convenience stores business, and Wal-Mart's Asda were both looking at Woolworths' portfolio, but were unlikely to take on a large number of stores.
"A lot of the shops are too small for supermarkets or too large for convenience stores, and a lot of the best sites have gone," said one source.
Another said fast-growing discount groups Aldi and Lidl might be interested, although that source thought they might be put off by the lack of car parking at many Woolworths sites.
Asda, Sainsbury and Aldi declined to comment, while Lidl was not immediately available.
Dan Butters, another Deloitte partner, said the firm had met the majority of EUK's customers and "constructive talks" had been held with suppliers to make arrangements to resume business.
