Dec. 17 (Bloomberg) -- Woolworths Group Plc’s stores are likely to close by Jan. 5, leaving 27,000 people out of work, as administrators said last-ditch talks to sell parts of the 99- year-old British retailer probably won’t succeed before then.

“We haven’t got a proposition which I would say is very close,” Neville Kahn of Deloitte, which has run Woolworths since it sought protection from creditors on Nov. 27, told reporters on a call today. “We’ve been in detailed discussions with people. Obviously they have looked at the business.”

Woolworths, which pioneered British discount retailing when it opened its first store in Liverpool, northwest England, in 1909, is the highest-profile casualty of a slump in consumer spending. The retailer had barely been profitable for four years, hurt by its debt burden, the loss of music sales to the Internet and increased competition from supermarkets.

About 22,000 permanent staff and 5,000 temporary workers are expected to lose their jobs should the stores close by Jan. 5, Kahn said. About 200 stores will close on Dec. 27.

Deloitte is in talks with other retailers regarding potential offers for 300 stores, and also had “considerable interest” for the other 500 outlets, Kahn said. Potential buyers also exist for the company’s trademarks, which include Ladybird clothing and Chad Valley toys, he said.

Share Suspension

Woolworths’ shares were suspended on Nov. 25. The company started offering discounts of as much as 60 percent this month in an effort to clear inventory, and traditionally makes all its profit in the second half as shoppers buy Christmas gifts.

Potential buyers of the business as a going concern face the challenge of financing, Kahn said on the call. “That’s going to be required to stock up and get the new Woolworths going,” he said. “That’s the challenge in the current economic climate.”

“I think Woolworths will come back to the high street at some point,” Kahn said. Expressions of interest were shown by companies in Asia, Africa and the Americas, he said. Food, clothing and “value” retailers were interested in the stores.

Woolworths stores will be stocked with 50 million more items carrying deeper discounts in the run-up to the closures.

Zavvi Entertainment Group, the U.K. music and DVD retailer formerly known as Virgin Megastores, is one of the customers that owes money to Woolworths’ wholesale unit, Entertainment UK, Khan said, adding that Deloitte is “actively chasing all debt.”

U.K. consumer confidence fell to the lowest in at least four years in November as unemployment jumped and banks curtailed credit, Nationwide Building Society said this month.

Deloitte is overseeing the carve-up of some of the last remnants of the business started in 1879 by Frank Woolworth in Pennsylvania. Thirty years later, his first U.K. store opened, selling glassware, children’s clothing and toys.

The U.S. department stores declined in the 1980s and Woolworth focused on its athletic-shoe unit, selling its U.K. business to Kingfisher in 1982. In the 1990s, Woolworths changed its name to Venator Corp. and then to Foot Locker Inc., which trades in New York.

To contact the reporter on this story: Louisa Nesbitt in Dublin at lnesbitt@bloomberg.net.

Last Updated: December 17, 2008 11:22 EST