Discount grocery group UGO has been bought by value retail chain Poundstretcher in a pre-pack deal, saving more than 200 jobs at its 20 UK stores.
UGO entered administration yesterday, February 8th 2012, but was immediately sold once John Russell and Gareth Rusling of insolvency practitioners P&A Partnership were appointed as its administrators.
All of the 245 staff members previously employed at the 20 UGO stores, located across the north and East Midlands regions of England, will now transfer over to Poundstretcher as part of the takeover.
Rusling commented: “This was a particularly complex deal and we focussed in our negotiations on transferring over the employees.
“We are pleased that we have been able to rescue the business and save so many jobs, particularly given the tough economic climate for the retail sector. Poundstretcher is a strong brand with a growing high street presence.”
UGO only started operating in January 2011 after taking over the stores previously run by convenience chain Netto which US owned grocery giant Asda was forced to sell on by the Office of Fair Trading as part of its takeover of the small store business in 2010.
The business quickly found trading difficult however as customers complained that prices were much higher than they were under Netto management and that there was limited stock.
In June Haldanes, the previous owner of UGO, entered into administration after threatening to sue The Co-operative for misleading it during the deal which saw it sell to 26 stores to the now failed-business as part of its takeover of the Somerfield group.
Poundstretcher’s decision to expand its store portfolio point to the strength of the value retail market at present, with competitor Poundland posting record profits of £642 million in full-year results published in October.