High street fashion retailer M&Co looks likely close all its stores, including the one in Congleton and Sandbach, after its administrators failed to find a buyer, putting 1,900 jobs at risk.
National media is reporting that the brand itself has been bought by Yours Clothing, which also owns BadRhino, Long Tall Sally, and Bump It Up Maternity, but no buyers have been found for the physical stores.
Administrators Teneo Financial Advisory were appointed by M&Co Trading on 9th December.
The latest report into the administration said the company continued to trade through the majority of its stores, website channels and with its concessions while a purchaser of the business was sought but, based on “offers received and discussions to date”, a sale of the company or “substantially all of the business” was not anticipated.
At the date of the administration, the company had 168 bricks and mortar stores located throughout the UK and the Isle of Man and traded through its online channels at mandco.com. Other stores include Nantwich.
The company also has routes to market through third party web platforms (Next, Amazon and Zalando) and traded with a small number of overseas franchise partners. As of 9th December, the company employed 1,810 people.
The administrator’s report said the company suffered as a result of a drawn-out recovery in retail sales in the post-pandemic period. In the months prior to administration, the deterioration in trading performance was compounded by high inflation, increasing the company’s cost base, and the cost of living crisis saw customers spending less.
In early November 2022, the company owed £12m in overdue supplier payments. The company was forecast to breach its lending facility limit this month (February) and forecasts had showed the company would still have overdue supplier payments in May. The company started making only business-critical payments and stopped selling gift cards.
The administrators said a solvent rescue of the business as a going concern was not possible and a third party debt restructuring was not considered to be feasible. The aim of the administration was to achieve a better result for creditors than would be achieved through an immediate liquidation of the company.
The stores have stayed open, and generated sales of £20.3m, an estimated net contribution to the administration estate of £12.3m.
Landlords have served vacation notices at seven stores and closures of these stores had been, or was in the process of being, carried out, with stock either liquidated on site or transferred to other stores.
The joint administrators said they expected to continue to trade through the website for a number of weeks, subject to the sales continuing to provide a “positive contribution” to the administration.
All store-based roles, and store regional manager roles, have so far been retained (other than those impacted by store closures as a result of landlord action) but 120 jobs were lost at the company’s head office and its London buying office.
The company operates from 171 leasehold properties, comprising 168 bricks and mortar stores, headquarters in Inchinnan, Renfrewshire, a London buying office and a storage unit in East Kilbride.
The administrator’s report said that while the pension scheme, third ranking floating charge holder, would not be repaid in full there would be payment in full to HM Revenue & Customs. Stock is the company’s most significant asset, with a net book value of £23.7m as of February 2022.
M&Co Trading, previously MacKay’s Stores until a 2020 administration, is a Scottish chain store selling women’s, men’s, and children’s clothes, as well as small homeware products.
Established in 1834 as pawnbrokers, MacKay’s switched to selling clothes in 1953. In 2005, the company rebranded as M&Co to reflect a more modern image.
(Photo: Grant Brammer / Google).