Three McColl's stores in Yate and Chipping Sodbury saved as Morrisons buys troubled business
THE future of three McColl's stores in Yate and Chipping Sodbury appears to have been assured after the convenience store business was rescued by supermarket giant Morrisons.
The board of McColl's started moves to put the business into administration on May 6, after its lenders withdrew their financial support for the business.
It put the future of more than 1,100 shops across the country, including the branches in Cranleigh Court Road, Abbotswood Centre and Broad Street in doubt.
But after a bidding war with EG Group, which owns rival supermarket group Asda as well as thousands of petrol stations and convenience stores across the UK and abroad, Morrisons bought the business from administrators PwC.
All 16,000 McColl's staff will be transferred to Morrisons, which was the group's biggest wholesale supplier, and the supermarket says all stores will continue to trade.
Around 270 McColl's stores were already operating under the Morrisons Daily format, including one in Lanaway Road, Oldbury Court, and now more are expected to be rebranded.
Other brands that were part of the McColl group included Clark Retail, Dillons Stores and Smile Stores.
Morrisons chief executive David Potts said: “Although we are disappointed that the business was put into administration, we believe this is a good outcome for McColl’s and all its stakeholders.
"This transaction offers stability and continuity for the McColl’s business and, in particular, a better outcome for its colleagues and pensioners.
"We all look forward to welcoming many new colleagues into the Morrisons business and to building on the proven strength of the Morrisons Daily format."
Morrisons will pay off "secured lenders and preferential creditors" in full under the deal, known as a "pre-pack administration" because it was finalised as soon as the administration took effect. Other creditors will receive some of what they are owed from McColl's reported £170 million of debts.
It has also been reported that Morrisons stood to lose £130m from its existing wholesale supply agreement to McColl’s stores if a deal had not been agreed.
McColl’s two pension schemes, with 2,000 members, will be taken on by the Morrisons Group.
The administrators said McColl's had faced financial pressure over recent years resulting from COVID-19 related disruption and "supply chain challenges, creating issues in product availability".
PwC joint administrator and partner Rob Lewis said: "As well as saving thousands of jobs, this deal secures a platform for the trustees of the Group’s pension schemes to enter into arrangements which will protect the pensions entitlements of so many people. All in all a really positive outcome.
“We wish Morrisons well with integrating McColl's into their business.”