Sarah Butler
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An estimated 2,000 jobs are under threat at Kwik Save after the troubled supermarket chain filed a notice of intention to appoint administrators.
After filing papers with the courts in Manchester, the 200-store chain, which appointed KPMG’s restructuring experts to help to find new funding at the end of last month, now has a deadline of next Friday to complete refinancing or call in the administrators.
Kwik Save last week announced plans to close 79 stores, nearly a third of its portfolio, as part an attempt to save the business.
The group is understood to be seeking finance from new sources as well as from Brendan Murtagh, a member of the Irish family that founded Kingspan, the property company that helped to refinance the business earlier this year.
It is hoped that at least part of the chain can be rescued through a “prepack” administration in which the best stores will continue to trade under a new owner.
However, retail insiders said that Kwik Save was likely to struggle to secure new funding as it had a number of strategic challenges, including many poor store locations and low scale compared with rivals such as Tesco and Asda.
It is understood that Kwik Save’s financial problems have led to a number of suppliers, including Arla, the dairy company, ceasing to trade with it.
Kwik Save has been struggling to survive since it was sold to a group of private investors by Somerfield, soon after the supermarket chain was taken private by a consortium led by Barclays Capital, Apax Partners and Robert Tchenguiz, the property entrepreneur.
The retailer faces increasing competition from high street retailers such as Tesco and J Sainsbury, which have been expanding aggressively into the convenience market. It also suffered distribution problems in its early days as a standalone business. The company has been through a string of management changes since its buy-out from Somerfield.
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There is no sign of the company making good on promised redundancy packages. I can see all of the redundant shop workers left high and dry by an asset stripping refinancing operation. I bet the company goes into a sham administration to allow "restructuring" by a friendly buyer who will keep the existing band of incompetent executives in place at the redundant workers' expense and allow the company to evade its responsibility to those it has made redundant.
A Kwik Save Worker, Pembroke Dock, UK
I left kwik save in april - about 6 weeks before they shut the shop. I left after 6 1/2 years because the company is going down. The reason the are reopening these 20 stores is because this potential investor has told them to or they have done it themselves to make them look more appealing. In two weeks they have went from saying these shops arent viable to economically potential - what a joke. To top it all off the week they closed the store I worked at I recieved a letter about redundancy and the next day I received a letter saying it was an error - ARE THEY MAD!!! There is a thing called the data protection act and we will see how they like it.
Martin, Gateshead, Tyne and Wear
I agree Smithy Emma and Carey what the hell is kwik save doing I am a ex employee I was made redundant in March nobody knows what is going on and neither do the big boys a monkey could do a better job why dont they tell people the truth stop messing people about and admit defeat they dont honestly think they can secure jobs they cant even put stock on the shelves.
julie, ferryhill,
Has anyone received letters asking them to return to work ?????
Smithy, N.East,
the way the staff have been treated is disgusting!!! the staff are never informed what is happening within the business (whats left of it!) surely a little respect from the ' big boys' at the top wouldnt go a miss! this is peoples lives theyre messin with!
emma, newcastle,
What are you playing at kwik save, and what's all this about opening back up stores when it's clear you could go into administration by the end of next week. Why are you not trying to save your remaining stores instead of messing with ones you closed down because you said they were "financially unviable", how come now you think they are not? I really, really hope you do not get away with this one. You've left staff made redundant back in March without redundancy, you've closed stores without any notice and now you are taking redundancy away from staff and offering them back secure jobs. SECURE! you must be having a laugh? Kwik save you have had your last breath, admit it and let the staff find themselves a desent job with better prospects. 16 months this nonsense has gone on for, NO-ONE TRUSTS YOU ANYMORE.
Carey, Warrington,
how can you close 79 stores and tell all these people they have lost their jobs offer them a redundancy package and completely mess up their lives to send them a letter less than a fortnight later to tell them their jobs are still there and to resume work within 4days . how can they possibly re-open a store with no stock , no money to buy stock and even if they did how can they fill it in that short amount of time. it is obvious there is more to this than meets the eye are these people being duped out of their redundancy ???because if they dont take their jobs back they end up with nothing, havent they been through enough already???
dawn, gwent,
This is all set up, they need to go into admin to protect themselfs.. latest is they looking to set up merchandising teams, some is to go into closed stores. order sheets are coming through and they are being told to order loads of stock. bread, milk and middlewich are comming back on line.They may even take on some of the staff they had made redundant.,this may be a smoke screen, i hope not it could be the start of pauls master plan.they company will no longer be classed as a supermarket they will all become a convience chain will maybe a change of name.
watch this space!!!
Allan, coventry,
Not a surprise, considering. I just feel very sorry for all the employees of Kwik Save and Somerfield, (the previous owners,) who have lost, or are about to lose their jobs because of what is happening.
Just about sums up private equity and ESPECIALLY BARCLAYS BANK WHO SEEN VERY KEEN TO LEND MONEY TO THESE PARARSITES.
David, Bristol,
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 used to work for these so I am not surprised. I left nearly 2 months ago due to the fact that the company didnt have a future. I left around the time of the nisa agreement ending and you just knew then that it was thank god I am leaving.
Martin, Gateshead, Tyne and Wear