My Local CEO Mike Greene has issued an apology after the company finally fell into administration yesterday.
The retailer, which bought Morrisons convenience business for £25m last September, has appointed Mark Orton and Blair Nimmo from KPMG Restructuring as joint administrators.
The chain operated 125 stores and employed 1,658 people across the UK. Before the appointment of the administrators, the directors concluded a sale of two stores. However, a total of 90 stores have closed this week, resulting in a significant number of redundancies.
While a further three are in the process of being closed, the remaining 32 stores remain open.
“I would like to thank our employees who have worked tirelessly since the launch to create a new, independent competitor in the convenience store market. It was never going to be easy. When we took over, the network was heavily loss-making and some stores had closed,” said Greene.
“The last nine months has been one of the toughest retail trading periods I have ever experienced and My Local has faced intense competition. This is the first time in 20 years that the convenience sector is not growing strongly. Some long-established high street names have gone and many of the large chains are shrinking the size of their networks. In addition, the supermarkets are cutting prices to compete with the discounters, piling further pressure on prices and margins, making it harder to compete.
“Of course it is easy to blame market conditions. But the reality is that, while we more than halved the rate of losses, the management team has been unable to return the business to profitability. For that I am truly sorry. We will continue to support the administrators in their efforts to safeguard as many jobs as possible.”
In a statement the retailer said that employees in stores which are sold will transfer to the new owners and Morrisons has confirmed that, where no buyer is found and stores close, it will welcome former employees back to a job at Morrisons. It also revealed that several other national retailers and supermarket chains are committed to considering staff for any available roles.
“Having explored a number of other options, the directors were unable to find a way forward and took the difficult decision to place the company into administration,” said KPMG’s Orton.
“Although the majority of stores have now closed, we are in active discussions with a number of interested parties in relation to both the remaining 32 premises that are trading and a small number of those that have closed. We are pursuing these opportunities as a matter of priority in the hope that we will be able to conclude successful sales and safeguard as many jobs as possible.
“We will also work closely with all employees over the coming days, in particular ensuring those who have been made redundant receive the necessary support they need.”
In the wake of the administration, Richard Lim, chief executive of independent retail consultancy Retail Economics, predicted increasingly tough times for retailers.
“The vote to leave the EU will heighten uncertainty on the retail industry and cast a spotlight on businesses overly reliant on the good times. We are entering uncharted waters with Brexit and our recent poll showed 61% of consumers feel that their personal finances will worsen in the coming months,” he claimed.
“With confidence on a knife-edge, consumers will boost savings and rein in spending on non-essentials which will leave some retailers facing unnerving declines in sales and precarious financial positions.”
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