The retailer said on Thursday that it was increasingly likely it would enter administration.
Image source, McColl’s
Convenience store chain McColl’s is on the brink of collapse, potentially placing thousands of jobs at risk.
The retailer said it was “increasingly likely” it would fall into administration unless talks around a rescue deal were successful.
The statement on Thursday came after Sky News reported the company could call administrators in on Friday.
More than 16,000 people are employed by McColl’s, which also has a partnership with supermarket Morrisons.
The company wrote 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”.
But the chain also stressed on Thursday that discussions are still ongoing.
It added that it wanted to create a “stable platform for the business going forward”.
The 1,400-store group has a wholesale tie-up with Morrisons, as well as Martin’s newsagents, with a strategy centred around an image of a “neighbourhood retailer”.
According to its website, it serves about five million customers each week, having been founded in Glasgow in 1901.
But earlier this week, the listed company warned that its shares would be suspended because it was unable to meet the deadline for filing its annual results.
McColl’s said that its accounts would not be signed off in time to meet the deadline.
Meanwhile, Sky News reported that Morrisons, one of Britain’s biggest supermarkets, had proposed a deal to McColl’s lenders, which involved the supermarket injecting funding.
McColl’s successfully raised £30m from shareholders last year to invest in driving the expansion of its Morrisons Daily convenience stores, but at the time it warned that footfall had been hit by the coronavirus pandemic.
Around the same time, it also faced allegations from the government that it had failed to pay some of its workers the UK minimum wage.
Pret, McColl’s and Welcome Break said the underpayments were historic errors and staff had been swiftly reimbursed.
The businesses were made to pay back the money as well as being fined £3.2m over breaches, such as deducting pay from wages for uniforms and expenses, or failing to pay the correct apprenticeship rate.
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- 20 December 2016
- 5 August 2021
