Thousands of jobs at risk as convenience store giant teeters on the brink of collapse 

Thousands of jobs at risk as convenience store giant teeters on the brink of collapse 

Thousands of jobs are at risk as one of Britain’s largest convenience store chains teeters on the brink of collapse, it has been reported. 

Breaking the announcement, Sky News said McColl’s, which has an extensive national partnership with supermarket giant Morrisons, could call in administrators as early as Friday. 

It is understood that the company’s collapse is expected to spark “renewed interest” in a partial takeover from both Morrison’s and EG Group, the petrol giant owned by TDR Capital and the billionaire Issa brothers Mohsin and Zuber. 

Sky News stated that inside sources claimed the situation remained “fluid” but a collapse into some form of insolvency proceeding was likely. 

In February, McColl’s was ‘scrambling’ to obtain fresh funding that would allay concerns about their future. 

The company employs around 16,000 people, or roughly 6,000 on a full-time equivalent basis. 

Eight months ago, £30m was raised from shareholders during a cash call. 

McColl’s trades from an estimated 1,100 convenience stores and newsagents throughout Britain. 200 stores trade under the Morrisons Daily format through a partnership with the supermarket giant. 

Sky News reported that Morrisons had proposed a rescue deal to McColl’s lenders during recent weeks. 

However, the proposed plan failed to garner traction. Industry insiders have suggested another draft could yet emerge. 

In November, McColl’s stated that they would be looking to expand the number of Morrisons Daily conversions from 350 to 450 within a year. 

If the supermarket giant is forced into administration, it would be the largest insolvency in the UK retail sector. 

Shares for the company have collapsed this year with the entire company worth less than £3.5m, Sky News said. 

McColl’s carries debts of almost £170m. 

Jonathan Miller, McColl’s recently departed chief executive, said last year was “undoubtedly tough” for the business, adding the impact of the pandemic and supply chain challenges were to blame. 

“Although we have been able to partly mitigate these external factors, they have still had a significant impact on underlying trading” he added. 

McColl’s said in a statement:  

“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”, they added. 

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