Published: 21st June 2016
Bosses of the recently formed My Local convenience store group have called in a team of advisers to help them turn around their struggling business, with administration understood to be one possible route forward for the organisation.
My Local was established as a standalone business after it acquired a total of 120 convenience store outlets from the supermarket group Morrisons for a price of £25 million in September 2015.
According to the Guardian, My Local’s bosses have now called in professional advisors from KPMG to help them decide how best to improve their operating prospects and financial position.
But with entering the business into administration apparently a potential way forward, there are fears for the futures of the 2,000 people who currently work for My Local across the country.
An entry into administration could also be bad news for the former owner of My Local’s stores, with Morrisons reportedly having retained guarantees on a number of lease obligations in the event of their new owners going out of business.
Trading has been tough for My Local since its formation, with convenience stores and established supermarket chains alike facing stiff competition from fast-growing, low-cost retailers such as Aldi and Lidl throughout the UK.
According to the Guardian, turnaround options being considered for the business include asset sales, with the Co-op group apparently a potential buyer for up to 10 of its British stores.
It has been suggested that My Local stores have struggled in part to perform well in terms of sales and profits during the past six months because they are in less than optimal locations.
Many of the sites opened recently as My Local outlets were acquired by Morrisons from Blockbuster Video as it collapsed as a business and ended its activities in the UK.
My Local is led by Mike Greene, who once appeared on the Channel 4 television show The Secret Millionaire and whose purchase of Morrisons’ 120 grocery stores was backed financially by the investment group GreyBull Capital.
Reports suggest that Morrisons’ guarantees relating to the convenience stores it sold in September last year could leave it with liabilities worth in the region of £20 million if My Local is unable to recover and goes out of business.
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