McColl’s chain of stores on the brink of collapse with thousands of jobs at risk
McColl’s chain of stores has said it looks “increasingly likely” that the group of 1,400 stores will go into administration unless an alternative financing solution is found
Image: McColl’s Retail Group)
McColl’s chain of stores has confirmed it is on the verge of collapse and could fall under administration, putting thousands of jobs at risk.
The convenience store business has been in talks with potential lenders to shore up the deal.
The 1,400-store group was crippled by the Covid pandemic, then supply chain problems, inflation and a heavy debt burden.
If these talks are unsuccessful, it is “increasingly likely that the group will be placed under administration.”
More than 16,000 people work at McColl’s, which also has a partnership with Morrisons.
In a statement, describing itself as “the UK’s leading community retailer”, a representative said: “As previously announced on 25 April 2022, the group remains in discussions about possible financing solutions for the business to address short-term funding issues to solve and create a stable platform for future business.
“While no decision has yet been made, McColl’s confirms that unless an alternative solution can be agreed at short notice, it is becoming increasingly likely that the group will be placed under administration with the objective of a sale of the group to a third party buyer and securing the interests of creditors and employees.
“Even if a successful outcome is achieved, it will likely result in little or no value being placed on the Group’s common stock.”
The spokesman said a further update would be made “as appropriate”.
Earlier this week it was revealed that the group’s shares are to be suspended from the London Stock Exchange as bosses said they were unable to sign off their accounts on time by auditors.
The company’s shares were already falling when it reported last month that talks with its lenders and banks would likely leave shareholders empty-handed in a rescue effort.
Sky News reported that Morrisons had proposed a deal to McColl’s lenders that would see the supermarket giant injecting finance.
Last year McColl’s successfully raised £30m from shareholders to invest in the expansion of its Morrisons daily convenience stores.
Around the same time, it was accused by the government of not paying some of its workers the minimum wage.
Pret, McColl’s and Welcome Break said the underpayments were historical mistakes and employees were quickly reimbursed.
The companies had to pay back the money and were fined a massive £3.2million for breaches e.g.
https://www.mirror.co.uk/money/mccolls-store-chain-brink-collapse-26886556 McColl's chain of stores on the brink of collapse with thousands of jobs at risk