ASDA bosses could step in to save collapsed corner shop chain McColl’s after it went bust yesterday.
The struggling convenience store business confirmed it would call in administrators yesterday afternoon, but the move put 16,000 jobs on the line.
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Now, the billionaire Issa brothers who own supermarket giant Asda could step up to take over the 1,100 failed shops, reports The Daily Mail.
The deal is rumoured to be agreed as soon as Monday, with the bosses thought to keep on all McColl’s stores and staff and potentially offer higher pay for many.
But the agreement isn’t set to include its pension scheme.
Rival supermarket chain Morrisons, which is a major wholesale partner of McColl’s, had also tabled a last-ditch effort to buy the business, which it said would have “kept the vast majority of jobs and stores safe”.
But the company confirmed “the lenders made clear that they were not satisfied that such discussions would reach an outcome acceptable to them”, before making the insolvency announcement.
McColl’s has struggled badly during the pandemic due to supply chain issues, inflation and a heavy debt burden.
Earlier this week, it was revealed the group was set to have its shares suspended from the London Stock Exchange as bosses said they would be unable to get its accounts signed off by auditors in time.
Shares in the company had already plunged as it reported last month that talks with its lenders and banks would likely leave shareholders empty-handed under rescue efforts.
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The fallout from the pandemic hadn’t helped either as retailers were hit hard with many well-known shops closing their doors forever.
That meant a large numbers of job losses as well.
Debenhams collapsed last year, with 12,000 jobs lost.
Its website was later bought by Boohoo though.
The fast fashion retailer also swooped for the brands Dorothy Perkins, Wallis and Burton, after Arcadia’s collapse, though it was the the end of its physical presence with 214 of its stores closed.
All Topshop, Topman and Miss Selfridge stores also closed, but the brand was snapped up for online by ASOS.
And on top of the struggling presence of the high street, businesses and households alike have been battling against supply chain issues and rocketing prices.
The Bank of England yesterday warned that inflation could hit 10% and the UK economy could enter a recession.
We also explain more on redundancy rights, should any more bids to take-over fail and McColl’s staff are left out of jobs.
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