McColl’s, a British chain of convenience stores with over 1100 branches, filed for bankruptcy. Its creditors refused a last-minute offer from Morrisons, putting 16,000 jobs at risk.
Morrisons not allowed to intervene
After months of unsuccessful negotiations, the British chain McColl’s has filed for bankruptcy today. The company’s creditors refuse to extend the credit lines of the ailing chain and also rejected a possible rescue by supermarket group Morrisons. Although the competitor showed willingness on Thursday night to take over the company and its 100 million pounds of debt, the deal did not offer enough guarantees, according to the lenders.
Morrisons and McColl’s have been working together for some time, however, as McColl’s operates some 250 Morrisons Daily convenience stores and the neighbourhood retailer buys certain private label products from Morrisons. The chain expressed its preparedness to also manage McColl’s pension fund, which involves thousands of Britons.
“In order to protect creditors, secure the future of the business and safeguard the interests of employees, the board unfortunately had no choice but to place the company into administration,” the retailer now states. PwC has been appointed as administrator. For 16,000 employees, the future is uncertain.
Issa brothers are after the loot
It is expected that the chain that originated in Glasgow, Scotland, will be sold on to a third party as soon as possible after the bankruptcy. The Guardian reports that a potential buyer is already known: the Issa brothers, who also own supermarket chain Asda and operate petrol stations across Europe, are reportedly ready to acquire the business. However, there is no formal deal yet and the administrator might enter into talks with other parties.
McColl’s was one of the only food players not to benefit from the Covid pandemic, whilst neighbourhood formats did remarkably well in that period. Yet the chain suffered from delivery problems, an inappropriate assortment and lacklustre experience. Good for a quick errand as a commuter or student, the shop proved unsuitable for weekly shopping. Things have been going downhill since the chain’s wholesale supplier went bankrupt in 2017 and the retailer had to look for a new purchase partner again shortly after.