- My Local formally enters administration, putting 1,658 jobs at risk
- Comes after filing an intention to appoint administrators last week
- Retailer was only formed last October after Morrisons sold its c-store business
- Some store leases will revert back to Morrisons, which has vowed to re-employ former staff
My Local, the convenience chain born out of Morrisons’ failed c-store business, has formally entered administration putting 1,658 jobs at risk.
As revealed by Retail Week earlier this month, My Local drafted in KPMG as an adviser, with refinancing and administration both being weighed up as potential options for the troubled business.
But last week the retailer filed an intention to appoint administrators after it struggled to come to terms with tough trading. My Local has today formally appointed Mark Orton and Blair Nimmo of KPMG to handle the administration of the 125 store chain.
Administrators have already closed 90 My Local stores, resulting in a “significant” number of redundancies, according to KPMG. A further three stores are in the process of being closed while 32 shops remain open and continue to trade.
Orton, a partner at KPMG, said: “Companies across the convenience store sector have faced significant challenges in recent times, through increasing competition, pricing pressures, changes in customers’ buying habits and general structural change within the sector.
“Since taking over the business in October last year, management have faced tough trading conditions and despite their best efforts to improve performance, My Local was ultimately unable to return to viability. 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.”
Orton said administrators were in discussions with “a number of interested parties” in relation to the 32 trading stores 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,” he said.
The chain’s collapse comes just months after BHS and Austin Reed tumbled into administration, while Beales and Store Twenty One have both launched company voluntary arrangements (CVA) since the turn of the year in a bid to combat fiercely competitive conditions in the UK retail market.
My Local was only formed last October by convenience veteran and star of TV show The Secret Millionaire Mike Greene, who, backed by Greybull Capital, acquired Morrisons’ convenience arm.
In a video interview with Retail Week, Greene laid out his vision for the retailer, which included a £1bn five-year supply deal with symbol group Nisa, although it is thought that orders from the retailer never reached that scale.
My Local is understood to have endured a tough period of trading during the first half of the calendar year, as the hotly contested grocery market and the impact of the national living wage both took their toll on the business.
Its collapse puts 1,658 jobs at risk, but Morrisons has already offered to re-employ any My Local staff who worked for the Bradford-based big four grocer before it sold the c-store business last September.
A portion of the store leases will now also revert back to Morrisons, which retained a guarantee on the shops when it sold them to My Local.
The supermarket giant has insisted the liability of the leases would cost it no more than £20m.