Scotland's M&Co seeks new investment after £50m Covid hit - report
Scotland-based value fashion retail chain M&Co is the latest British business to call in advisers as it mulls its future prospects. The company has appointed Deloitte to look at its options that are believed to include a pre-pack administration and/or finding new backers.
The business, formerly known as Mackays, is one of Scotland's biggest family-owned retailers and has been suffering from a sales slump that was made worse by the pandemic and its associated lockdown.
Sources told Sky News that a number of turnaround funds and private equity firms had been approached to assess any interest in a deal. M&Co hasn't commented on the story.
The company has over 260 stores in the UK and employs around 2,700 people so anything that happens to it would make a big impact.
Founded in 1961, it remains in the hands of the McGeoch family with its current CEO being Andy McGeoch.
The news report said the firm had spoken to staff about the potential restructuring and that it was facing a £50 million revenue shortfall caused by the lockdown.
Around 18 months ago, the company had cut some jobs as it responded to the growth of e-commerce and said that online sales would become a bigger focus for the business. But it still clearly relies heavily on trading through its stores as the dent to its revenues caused by Covid-19 has shown.
But the CEO is reportedly upbeat about the company’s prospects of survival and Sky said that in a memo he highlighted how changing consumer behaviour could see more people shopping in their local towns rather than travelling long distances.
The company operates in England and Northern Ireland as well as Scotland and most of its stores are now open.
It could be an attractive prospect for new investors. In the last year for which figures are available (the year to February 2019), its operating profits fell by 40%, but it was still in the black and made £3.6 million, while it also cut its debt load by more than half to £8.7 million.
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