Theo Paphitis pulls out of Woolworths talks

LONDON (Reuters) - Entrepreneur Theo Paphitis said on Thursday he had pulled out of the running to buy Woolworths' WLW.L 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 became the country'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 announced on Thursday afternoon that Woolworths stores would hold a sale on Friday with discounts of up to 50 percent.

"We anticipate increased footfall in the stores and have hired additional staff to cope with increased demand," said Deloitte partner Neville Kahn.

The sale would include discounting on Christmas goods such as toys, decorations and cards, Deloitte said.

The Woolworths "Biggest Ever Sale" is the latest in a trend of one day pre-Christmas sales held in the UK in recent days. Other retailers who have held such sales include Marks & Spencer (MKS.L) and Debenhams (DEB.L).