Around 16,000 jobs at risk as convenience store chain McColl’s nears collapse
The convenience store chain said it was "increasingly likely" that would fall into administration.
One of Britain’s largest convenience store chains is nearing the brink of collapse, with thousands of jobs said to be at risk.
McColl’s – which employs more than 16,000 people, and has several stores throughout Greater Manchester and the North West – said it was “increasingly likely” that it would fall into administration unless talks around a rescue deal were successful, Sky News reports.
The 1,400-store McColl’s Group – which has an extensive wholesale partnership with Morrisons, as well as Martin’s newsagents – has always had strategy centred around an image of a “neighbourhood retailer”, but after suffering unprecedented difficulties throughout and post the COVID-19 pandemic, has issued a statement saying administrators could be called in today.
The company said in its statement that without any fresh funding in the short-term, the group would likely “be placed into administration with the objective of achieving a sale of the group to a third-party purchaser and securing the interests of creditors and employees”.
The chain added that it wanted to create a “stable platform for the business going forward”, but also stressed that discussions were still ongoing.
McColl’s said in a statement to Sky News: “As previously disclosed on 25 April 2022, the Group remains in discussions regarding potential financing solutions for the business to resolve short term funding issues and create a stable platform for the business going forward.
“However, whilst no decision has yet been made, McColl’s confirms that unless an alternative solution can be agreed in the short term, it is increasingly likely that the Group would be placed into administration with the objective of achieving a sale of the Group to a third-party purchaser and securing the interests of creditors and employees.
“Even if a successful outcome is achieved, it is likely to result in little or no value being attributed to the Group’s ordinary shares.”
According to Sky News, the company’s imminent collapse is expected to spark renewed interest in a partial takeover from both Morrison’s and EG Group – the petrol retailing giant owned by TDR Capital and the billionaire Blackburn-based brothers, Mohsin and Zuber Issa.
News that the McColl’s is teetering on the brink of collapse this week comes after it was revealed that the group’s shares have collapsed this year, and the entire company is now worth less than £3.5 million, with the company said to be carrying debts of almost £170 million.
Jonathan Miller, McColl’s recently-departed chief executive, said in December 2021 that the financial year had “undoubtedly been a tough year for the business”.
Mr Miller is understood to have personally invested £3 million last year in a bid to convince other shareholders to support the company.
If McColl’s is forced into administration this week, it would be the largest insolvency in the UK retail sector by size of workforce since the collapse of Edinburgh Woollen Mill Group in 2020, Sky News said.
It would become the latest in a long line of casualties of changing retail shopping habits and the pandemic.
Featured Image – McColl’s