The chain has revealed that it has gone bankrupt and will hire administrators, threatening 1,100 stores and 16,000 jobs
Convenience chain McColl’s has confirmed bankruptcy and will appoint an administrator, putting 1,100 stores and 16,000 jobs at risk.
Supermarket giant Morrisons proposed a last-minute rescue deal, after the struggling chain previously said it could go live.
But those proposals seem to be too late.
Sky News first reported on Thursday, May 5 that the company could call administrators as early as the next day.
McColl’s has been in talks with potential lenders to help shore up the company, which is struggling during the pandemic due to supply chain challenges, inflation and debt burdens.
But it said talks with lenders broke down on Friday (May 6) after creditors refused to extend a deadline for the company to find more capital.
Here’s everything you need to know about it.
What is McColll?
McColl’s Retail Group is a British chain of newspaper and convenience stores operating under the names Morrisons Daily and McColl’s (for convenience stores), Martin’s (for newsstands and pound shops) and RS McColl in Scotland.
The company operates more than 1,100 convenience stores in England, Scotland and Wales.
It was founded in Glasgow in 1901 and serves about five million people a week, according to its website.
Morrisons and McColl’s are major partners, and McColl operates hundreds of convenience stores under the Morrisons Daily brand.
The company employs 16,000 employees, the majority of whom are part-time; It was hoped a deal with Morrisons would save those jobs.
Why is it difficult?
Teresa Wickham, a former director of Safeway, told the BBC’s Today programme, that McColl’s was “having a hard time, especially with Covid-19”.
She said the pandemic comes at a time when the company is transitioning from typical convenience stores to offering more fresh fruit through an alliance with Morrisons supermarket.
Wickham says the stores that have done this have performed well as shopping habits shift to more local produce during the coronavirus crisis, but the chain lacks investment and has only a small percentage of stores. convert.
In 2021, McColl’s was also accused by the government of not paying the minimum wage to some of its employees.
It claimed the underpayments were due to past errors and staff were reimbursed in a timely manner, but was ordered to refund the amount as well as a £3.2million fine for breaches such as withholding. deduct wages for uniforms and expenses, or fail to pay the correct apprenticeship rate.
It went bankrupt?
McColl’s said that unless negotiations with the lenders can be successful, the group will “increasingly be forced to run.
In a statement, a representative said: “McColl’s confirms that unless an alternative can be agreed on short-term, the group capacity will be taken into administration with the goal of achieving a group sale. to a third party – the buyer and secure the interests of creditors and employees.
“Even if a successful outcome is achieved, it is likely to result in little or no value attributed to the group’s common stock.”
Retail insiders say McColl’s situation remains stable, but falling into insolvency is now more likely than not.
It has now been confirmed that the chain has gone bankrupt.
McColl’s will apply to the court later today to appoint administrators, and stock market shares have been suspended.
What happens next?
Sky News reports that Morrisons has suggested to McColl’s lenders a proposal in which the supermarket would fund; That idea hasn’t gained traction, according to insiders.
An amended offer has been made, which is expected to cover McColl’s pension obligations as well as the company’s £170m debt in a bid to save as many shops and jobs as possible.
The company said in a statement to the London Stock Exchange: “In order to protect creditors, protect the future of the business and protect the interests of employees, it is regrettable that the board of directors has ceased to exist. no choice but to put the company under management.”
McColl’s has appointed PriceWaterhouseCoopers as administrator, “with the expectation that it intends to launch the sale of the business to third-party buyers as soon as possible.”
PA bulletins report that the Morrisons have now approached PwC; a rescue arrangement would also treat the business as a permanent concern, deal with debts of more than £100m and take charge of the company’s pension scheme.
https://www.nationalworld.com/business/mccolls-stores-convenience-shops-administration-latest-share-price-news-morrisons-deal-3682808 McColl’s: Will the convenience store chain collapse?