Morrisons has rescued convenience retailer McColl’s from administration, saving 16,000 jobs.
The supermarket chain will take on McColl’s 1,160 shops and its two pension schemes, which together have more than 2,000 members. It will also pay off McColl’s £170m debts.
McColl’s went into administration on Monday (9 May), citing Covid-19 related disruption and supply chain challeges which affected product availability and customer spending. It was immediately sold to Alliance Property Holdings, part of the Morrisons Group, which is McColl’s largest supplier.
Rob Lewis, joint administrator and partner at PwC, said: “Especially during the current economic climate, the completion of this transaction provides much needed certainty to McColl’s 16,000 staff after a period of understandable concern following the group’s challenges over the past months.
“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.
“Morrisons wholesale supply agreement will continue in place after the transaction minimising disruption to customers and employees as all stores will continue to trade. We wish Morrisons well with integrating McColl’s into their business.”
Morrisons and fuel station empire EG Group battled it out for McColl’s. According to reports, Morrison’s first offer was rejected, but it later matched EG Group’s offer to pay off McColl’s debts in full and take on all stores and staff.
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.”
However, a former senior head of department at McColl’s told the BBC some staff felt let down that the rescue had come so late in the day.
“This isn’t just a deal, it’s people’s lives,” the unnamed person said.