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FRESH evidence of the cash crisis facing discount grocery chain Kwik Save emerged this weekend – only days after it announced the closure of 79 stores.
The Sunday Times disclosed last week that dairy group Arla had stopped supplying Kwik Save with milk because of “payment problems”. And now British Bakeries – part of Premier Foods, with brands such as Hovis and Mothers Pride – has halted bread deliveries to Kwik Save.
Premier said it could not comment on commercial agreements. But reliable sources confirmed that British Bakeries has stopped supplying Kwik Save. As with Arla, “payment problems’’ were alleged to be the reason.
Some Kwik Save stores have not received any cigarettes for months. And there is said to have been disruption to the chain’s supplies of chilled and frozen goods.
Kwik Save, which was shed by Somerfield in February last year, said three months ago that it had received a cash injection from Irish property tycoon Brendan Murtagh. Paul Niklas, who headed Kwik Save for a few months after the Somerfield disposal, returned to run the business.
But in March, Kwik Save came close to going into administration. It struck a short-term deal with Nisa-Today’s to replenish its stores, many of which were running out of basic goods. The arrangement lasted only a few weeks.
Kwik Save approached Costcutter last month, hoping to secure access to a number of brands for which it had been impossible to negotiate terms with manufacturers. But Costcutter said it would not start supplying unless it could secure payment upfront. It is not clear how much money was injected by Murtagh in the February restructuring: a figure of £50m was suggested, but the total is thought to have been far smaller. Now Murtagh is said to be calling the shots.
Restructuring experts at the accountancy firm KPMG have been called in to see if there is a way that Kwik Save can be saved from bankruptcy. If it does go bust, it is thought likely that Grant Thornton will be appointed as administrators. Insiders at KPMG reckon that it will take a week or two to determine whether the business can be rescued.
The retailer announced the closure of 79 of its 226 stores last Tuesday. It is estimated that 800 people lost their jobs.
Kwik Save was unavailable for comment.
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i worked for kwik save for over 10 year, through good and bad, but i quit on day 1 of bttf taking over. they had no idea or real plan and to be honest were living in the past far to much, retail as moved on since the 80's and 90's. they should be ashamed at what they have done, although we should also remember somerfield dumped the store on them before they were ready.
i now live 5000 miles away from the nearest kwik save but feel sad at what these people have done.
john, sacramento,
Heard today that kwik save are opening back up some closed down stores, what is going on? They have applied for administration but are saying that they can open stores back up????????????? Can they get away with treating people like this? I really cannot get my head around it all, never before have i heard anything so ridiculous. What's going to happen, open up and have to close again, what an absolute farce. Paul niklas, steve Mc you ought to be sacked, you are messing with peoples lives, unbelievable.
D.hughes, wales,
What can you say just look at the pedigree of the people running it, it was doomed to start with.
DAvid c, Sheffield, england
oh what a suprise!!!i was made redundant last week by kwik save and have had a redundancy package that is too good to be true.this is due to be paid on the 21st but look now like i may get nothing if they go into administration,kwik save have known what they were doing from day one,running the shops down on purpose,shutting 79 stores last week and sending us all a decent redundancy package so we keep quiet, me and my partner both worked for kwik save for many years and they have treated us and all there loyal staff like idiots,we are relying on our redundancy money to pay our bills but now looks like we wont get a penny from them,this has been one big con from day one ,they never had any intention of paying us what we are entitled to the plan all along was to go under so they dont have to pay us,i just hope that the board and directors have some concience and dont let this happen to the thousands off staff that will be left with nothing.
janet, glossop,
i agree totally with both comments, we tried for a long long time to stay positive but there came so much negativity- lack of communication was the worse thing, and like s clark said how can anyone run a business without the basics- our customers dont want 20 lines of cleaning goods or non food they want milk bread and staple foods.
c.pye, staffordshire, uk
absolutely agree with sclark from swansea the promises that we were asked to believe were unbelievable .I bet they dont come out of this with nothing ,unlike the flak we ,as sfaff have had to take from customers who assure us we MUST know whats going on .they have treated loyal staff worse than dog muck and expect us to carry on as normal with DUE DILIGENCE as mcardle says .You try and pacify customers that DO come in and still sit and be normal come on mcardle this is where you got us you explain to them and perhaps as usual we will find out from the public we are going down.our shop was a goldmine till these people got their hands on it and ran it into the ground and the staff with it.
a sharples, egremont,
I worked for kwik save for many years and last week I was made redundant because my store was one of the many that closed down. Roughly about 800 people were made redundant last week now it looks like the rest may be sinking with us, around another few thousand people!! It's so sad to see, but what has kwik save done to try and save our jobs? Not paid for milk and bread that's what they've done! how can a supermarket/convienience store be run without basic everyday items? What idiots, a 2 year old could do better. As for redundancies - I can't see any of us getting it off kwik save, they are likely to go bust before june 21st. How are we surposed to survive not knowing if we are getting what's owed to us? And will kwik save give us any warning or reasurrance that this will or will not happen, No Chance! they never communicated with us when we we were employed by them so why should they care about us now we've been tossed out into the street.
S. clark, swansea,
The writing is on the wall, they know what they are doing, they are forcing the company into this situation ready to go into administration once this month is out.They don't seem to have any other option.Quite where this leaves the people just made redundant or the staff that are left goodness knows? I only hope that Mr Murtagh manages to keep the company solvent long enough, if he is calling the shots whats happened to Paul Nicklas?Is this just 'another short term appointment'.Mr Murtagh needs to bring in an top name retail director as the ones that he has can't do the job,time and time again they have messed things up how much longer are we to put up with this? They seem to keep their jobs when we are loosing ours that not right we are always at the dirty end of the stick.This company can continue the few remaining customers have told us that if things improve they would continue to shop with us. WE need to start now.
Martin, manchester,
Well, well kwik save you are in a pickle aint you?? What on earth happened to the 50 million back in March? since March there's been red letters from electricity suppliers threatening to cut off supply, there's been no proper deliveries into the stores only cleaning products and pound shop nonsence, and now no bread and milk!!!!!!!!
Mr niklas and crew, I hope you will be doing the decent thing and paying out redundancies to the poor staff made redundant last week, as i've heard the people made redundant in March are still waiting for their packages. I bet mr niklas has got a top of the range car, big house etc, and the people that's fought hard to keep the buisness running for the past year got to fight tooth and nail to get what's rightfully owed to them. The way this company has gone about things is disgusting, they should be ashamed of themselves. If you're gonna shut up shop just pay your loyal workers what's owed to them and then they can focus on finding a decent job.
anna watts, warrington,