Corner shop chain McColl’s goes bust putting 16,000 jobs and 1,100 shops at risk
CORNERSHOP chain McColl's has confirmed it has gone bust putting 16,000 jobs and 1,100 shops at risk.
The struggling convenience store business has confirmed it will call in administrators.
The retailer had been in discussions with potential lenders to get a short-term loan, but discussions have failed.
The company said in a statement to the London Stock Exchange: "In order to protect creditors, preserve the future of the business and to protect the interests of employees, the board was regrettably therefore left with no choice other than to place the company in administration, appointing PriceWaterhouseCoopers as administrators, in the expectation that they intend to implement a sale of the business to a third-party purchaser as soon as possible."
McColl's will apply to the court later today to appoint the administrators.
McColl's has struggled badly during the pandemic due to supply chain issues, inflation and a heavy debt burden.
McColl's employs around 16,000 staff at more than 1,100 convenience shops across England, Scotland and Wales.
It had been rumoured that supermarket Morrisons could rescue the chain from collapse and save jobs, according to .
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In a statement in which it described itself as "the UK's leading community retailer", a representative said: "As previously disclosed on April 25, 2022, the group remains in discussions regarding potential financing solutions for the business to resolve short-term funding issues and create a stable platform for the business going forward.
"However, whilst no decision has yet been made, McColl's confirms that unless an alternative solution can be agreed in the short term, it is increasingly likely that the group would be placed into administration with the objective of achieving a sale of the group to a third-party purchaser and securing the interests of creditors and employees.
"Even if a successful outcome is achieved, it is likely to result in little or no value being attributed to the group's ordinary shares."
The spokesman said a further update would be made "as and when appropriate".
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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.
The pandemic hit retailers hard with many well-known shops closing their doors forever and large numbers of job losses.
Debenhams collapsed with 12,000 jobs lost last year, but its website was later bought by Boohoo.
The fast fashion retailer also swooped for the brands Dorothy Perkins, Wallis and Burton, after Arcadia's collapse. 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.
Business and households have continued to struggle after the pandemic due to 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.
What are my redundancy rights?
Before making you unemployed, your employer should still carry out a fair redundancy process.
You are entitled to be consulted on the redundancy lay-off first and to receive a statutory redundancy payment, as long as you've been working somewhere for at least two years.
How much you're entitled to depends on your age and length of service, although this is capped at 20 years. You'll get:
- Half a week’s pay for each full year you were under 22,
- One week’s pay for each full year you were 22 or older, but under 41,
- One and half week’s pay for each full year you were 41 or older.
Sadly, you won't be entitled to a payout if you've been working for your employer for fewer than two years.
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There should be a period of collective consultation as well as time for individual ones if your employer wants to make 20 or more employees redundant within 90 days or each other.
You are also entitled to appeal the decision by claiming unfair dismissal within three months of being let go.
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