McColl's: Morrisons rescue deal saves Scarborough shop from closure after retail giant collapses into administration
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The nationwide chain has 1,100 stores and newsagents employing more than 16,000 staff, including one in Scarborough at the corner of Westwood Road and Valley Road.
McColl's Retail Group said that the company's lenders did not want to extend banking agreements which had been keeping the business afloat, meaning it collapsed into administration on May 6.
The retailer has struggled during the pandemic with supply chain issues, inflation and millions worth of debt.
A last-minute rescue deal from Morrisons was initially rejected by lenders, but negotiations continued over the weekend with the supermarket agreeing to pay McColl's £170m debts and take on its shops and pension scheme.
Accountancy firm PwC placed McColl’s into administration on May 9 and was immediately sold to Morrisons.
The nationwide supermarket and McColl's already have an existing relationship with 270 shops operating as Morrisons Daily concessions under a previous agreement.
Rob Lewis, joint administrator and partner, PwC, said: "Especially during the current economic climate, the completion of this transaction provides much needed certainty to McColl's 16,000 staff after a period of understandable concern following the group's challenges over the past months."
The last-minute rescue deal has been welcomed by retail trade union Usdaw. Joanne McGuinness, Usdaw's National Officer said: "It is great news that Morrisons has been successful in their bid to buy McColl's out of administration and it will be a huge relief for the staff.
"We are now seeking urgent discussions with Morrisons to help secure the future for the staff."
According to its website, McColl's serves four million customers every week and was founded in Glasgow in 1901.