Photograph: Chris Radburn/PA
Morrisons is offering to hire former staff who lose their jobs as a result of the likely collapse of My Local, the group which took over the supermarket’s convenience store chain last year. My Local has filed a notice of intention to appoint administrators, putting 1,700 jobs at risk.
Morrisons said in a statement: “We are saddened and disappointed to learn that My Local is about to enter administration. We want to help our former colleagues who now work for My Local. We can therefore confirm that if no buyer is found, and stores close, we will welcome our former colleagues back to a job at Morrisons.”
The accountancy firm KPMG, which has been working with My Local’s management on considering options for the future of the 120-store chain, was lined up on Tuesday afternoon to handle an administration. It is not certain whether administrators will be appointed; the notice provides protection from creditors for 10 days before the company potentially tips into administration.
Any appointment could mean a possible liability of up to £20m for Morrisons, which sold the convenience store chain for £25m in September 2015 to a group fronted by the retail veteran Mike Greene, who appeared on the Channel 4 show The Secret Millionaire.
The My Local deal was backed by Greybull Capital, which was a co-investor, along with OpCapita, in Comet, the electrical retailer that collapsed in controversial circumstances in 2012.
As part of the sale of its convenience stores, Morrisons retained a guarantee on a number of lease obligations, meaning that they will revert to the supermarket if My Local collapses. At the time of the sale, the leases on the stores were thought to have an average of about five years remaining.
Morrisons sold 140 My Local stores, at which about 2,300 people were employed, but it is understood that 25 have already closed or been sold on, and about 600 jobs have gone as the chain has downsized amid disappointing sales.
The chain has suffered because of the poor location of its stores, many of which were former Blockbuster sites bought when the video rental chain went bankrupt.
The grocery market is in the middle of a price war prompted by the rise of the discounters Aldi and Lidl, which have been rapidly opening stores and winning over more customers.
My Local is the latest retailer to come under pressure following the collapse of BHS and Austin Reed, both of which called in administrators in April. Brantano went into administration in January, but the majority of jobs were saved after the footwear chain was bought back by its owner Alteri a month later.
