We reveal this week that variety store group Woolworths has slimmed down central staff numbers. About 60 have gone from the London headquarters and its Castleton satellite, near Rochdale.

The savings will be welcomed by the City, which likes the way chief executive Trevor Bish-Jones has handled his cost base over the past few years, but wondered how long it could last. Cost is an important calculation, given how difficult the retailer has found life on the high street as supermarkets and others parked their tanks on Woolworths’ lawn.

Key as efficiency may be, though, it is unlikely to transform sentiment towards the retailer. The City derision that greeted Bish-Jones’s news last month that Woolworths’ retail division would return to profit this year showed that the Square Mile remained unconvinced about future prospects

The retailer, whose shares have traded at less than 10p this year, seems to be viewed almost as a penny stock and some analysts ascribe zero value to the retail arm.

But surely Woolworths isn’t finished yet? The stores business has a strong position in categories such as toys, owns powerful brands such as Chad Valley and Ladybird, has pushed into multichannel and has introduced the Worth It! value range successfully. Even if the shops continue to struggle, Woolworths’ product range and portfolio may well provide an opportunity for another retailer. The chance of corporate activity must remain on the cards.

The strength of group stablemates EUK and 2entertain – as well as stakeholder Baugur’s determination to derive some value from its investment – raise the likelihood that, if Woolworths cannot recover under its own steam, radical solutions will be sought.

Whether it comes through recovery or break-up, there may be more value in Woolies than its share price reflects.

Wherever Next?

Next’s decision to internationalise its online business makes sense. There is no sign of an end to the domestic slowdown that has hit fashion retailers especially hard but Next has the experience to take its multichannel offer into new markets.

It’s a strategy that removes the need to open stores too, providing a low-cost, low-risk way of expanding the business. The retailer may be finding life tough, but its willingness to try new things rather than retrench is welcome.

George MacDonald is deputy editor of Retail Week