- All strategic options under consideration
- Tough grocery market and impact of living wage thought to have hit trading
- Business was only launched October 2015
My Local, the convenience chain born from the ashes of Morrisons’ c-store estate, is in talks with advisers over strategic options following lacklustre trading.
My Local has brought in KPMG to advise it on options, which are thought to include renegotiating better terms with its suppliers, refinancing and even administration, Retail Week has learned.
The retailer, set up in October 2015 by entrepreneur and star of The Secret Millionaire Mike Greene, is thought to have suffered challenging trading in recent months as the tough grocery market combined with the impact of the living wage hit performance.
It emerged last month that My Local was trying to sell about 25 of its 140 stores, raising questions over its trading performance. If the retailer was to call in administrators, 2,300 jobs would be under threat and a portion of the store leases would revert to Morrisons, which retained a guarantee on the shops when it sold them to My Local.
At the time of the deal it was estimated that the liability of the store leases could cost Morrisons up to £20m.
The development comes just eight months after Greene, backed by Greybull Capital, launched the new business, which is supplied by Nisa symbol group.
Sources have told Retail Week that because of a poor product mix, a tough grocery market and external factors including the living wage, which arguably hits smaller stores hardest as they are not in a position to shed staff in order to offset the cost in wages, trading performance has been disappointing.
Questions have also been raised over the quality of the store locations. Morrisons acquired many of the sites from bust retailers including Blockbuster and Jessops when it rushed to set up its convenience arm in 2013. Morrisons boss David Potts decided to pull out of convenience stores shortly after joining the grocer in March 2015.
My Local was unavailable for comment. Greybull and KPMG declined to comment.