Convenience store chain My Local has officially confirmed that the company has entered administration.
According to a statement circulated last night, the company board appointed Mark Orton and Blair Nimmo from KPMG Restructuring as the administrators and would “seek to achieve the best outcome” for the business and its employees.
Since Morrisons sold it to Greybull Capital in September last year, My Local has faced sharp competition and has been unable to return the business to profit.
My Local employed 1658 people in 125 trading stores across the UK. Since news emerged last week that the grocery retailer was on the brink of administration, 93 stores have closed down, leaving around 1200 people out of work. Only 32 stores remain open.
Employees in stores which are sold will transfer to the new owners. For stores where no buyer is found, Morrisons has said it would welcome its My Local employees back to a job at their company.
A few other supermarket retailers are also believed to be considering My Local employees for any available roles.
My Local chief executive Mike Greene thanked his employees for their hard work, but conceded the company was “heavily loss-making” and some stores had closed when they took over last year.
Recent data from the Local Data Company also suggested convenience stores were the slowest growing segment in the groceries sector over the last five years.
“Some long-established high street names have gone and many of the large chains are shrinking the size of their networks,” Greene said.
“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.
“For that I am truly sorry. We will continue to support the administrators in their efforts to safeguard as many jobs as possible.”
Richard Lim, the chief executive of independent retail consultancy Retail Economics, said the collapse of My Local in the same year as BHS and Austin Reed was further evidence of “turbulent times” facing British retailers – and that things are only going to become harder in the wake of last week‘s Brexit referendum.
“The vote to leave the EU will heighten uncertainty on the retail industry and cast a spotlight on businesses overly reliant on the good times,” he said.
“We are entering uncharted waters with Brexit and our recent poll showed 61 per cent of consumers feel that their personal finances will worsen in the coming months.
“With confidence on a knife-edge, consumers will boost savings and rein in spending on non-essentials which will leave some retailers facing unnerving declines in sales and precarious financial positions.”