Rescue deal for retailer
M&Co confirms closure of 47 stores in pre-pack deal
The company will keep more than 200 stores open
Scottish fashion retailer M&Co has confirmed that 47 stores will close and 380 jobs will be axed in a pre-pack administration that will keep the business trading on the high street.
A restructuring deal, reported by Daily Business over the last week, will see a new company created that will save more than 2,200 jobs.
The administration process, which is being managed by Deloitte, will see the estate reduced from 265 to 218 stores. The debt opportunities arm of Aurelius, a prominent investment firm, is understood to have provided funding.
The new business will retain more than 200 stores and will be run, as predicted, by Mackays CEO Andy McGeoch whose family has owned the business since 1961.
He said: “Like many of the UK’s best-known High Street names, we’ve been facing up to a number of underlying business challenges in the current retail environment, which have been exacerbated by the impact of COVID 19. Being forced to close all our stores for several months meant a huge financial hit.
“We reopened most stores in June and have been exploring every possible option, but it was obvious that the business, as previously structured, would remain under severe pressure from the ongoing challenges of Covid-19.
“It quickly became clear that best way to save most jobs and most stores was to enter administration, with a new company acquiring the assets of the old business, and this process has now been finalised.
The most difficult part of this process is undoubtedly seeing around 380 colleagues in stores and at our Glasgow and London operations leaving the business.– Andy McGeoch
Mr McGeoch added: “It’s not a decision we took lightly, after more than 50 years of trading, but it gives us a sustainable basis from which to rebuild, with the majority of our staff keeping their jobs and 218 stores in High Streets across the country remaining open.
“The most difficult part of this process is undoubtedly seeing around 380 colleagues in stores and at our Glasgow and London operations leaving the business.
“It’s a terrible situation for them and I’m desperately sorry that we couldn’t come up with a viable plan which would have saved all the jobs.”
With the coronavirus outbreak reducing appetites to travel longer distances on public transport, the company believes that its network of over 200 local High Street stores will play a major role in the company’s future performance.
Mr McGeoch added: “The response from our loyal customer base during lockdown was phenomenal.
“We had a steady stream of requests for updates, with some customers even posting letters through the doors asking when we were reopening. It’s hugely encouraging to hear our customers say how much they have missed us after months away.”
In its last published accounts for the year to February 2019 it reported earnings before interest, tax, depreciation and amortisation of £8.7m and an operating profit of £3.6m. Its net debt fell in the same period from £19m to £8.7m.
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