The My Local c-store chain has officially entered into administration days after the majority of its stores were closed.
Mark Orton and Blair Nimmo from KPMG Restructuring have been appointed joint administrators to the trading company MLCG Limited. A total of 90 of the 125 stores have already been shut following closing down sales in recent days. A further three are in the process of being closed, whilst the remaining 32 stores will remain open whilst talks with potential buyers take place.
My Local employed 1,658 people, although last week the chain’s former owner Morrisons offered to hire staff that lose their jobs if the business went under.
Commenting on the chain’s failure, Orton 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.”
My Local’s Chief Executive Mike Greene commented: “This is the first time in 20 years that the convenience sector is not growing strongly. Some long-established high street names have gone and many of the large chains are shrinking the size of their networks. In addition, the supermarkets are cutting prices to compete with the discounters, piling further pressure on prices and margins, making it harder to compete.
“Of course it is easy to blame market conditions. But the reality is that, while we more than halved the rate of losses, the management team has been unable to return the business to profitability.”
Earlier this month, the Local Data Company (LDC) released data suggesting that the convenience market was now reaching saturation point.
- Suppliers have little option other than wait and see…
- Apart from anticipating probable purchases of the remaining stores, taking a view on possible new owners and tweaking trade strategies accordingly…