Harper Macleod has advised on the restructuring exercise which has seen Scottish headquartered retail fashion chain M&Co save 2,300 jobs and more than 200 stores, as well as the rescue of its Pension Scheme.
Following the start of the Coronavirus pandemic, which forced most UK retailers to close their doors for nearly four months, Mackays Stores Ltd, as one of the largest privately owned retailers in the country, in April took the necessary step of appointing restructuring advisors. This ultimately led to the business being sold to a new company, M&Co Trading Limited.
A 15-strong team from Harper Macleod, led by Partners Chris Kerr (Corporate), Gordon Hollerin (Restructuring) and Tony Cameron (Banking) advised M&Co Trading Limited on the transaction. The firm advised on all legal aspects of the exercise, including property, employment law, commercial contracts and intellectual property.
Chris Kerr said: “I’ve known the family for a number of years and was delighted that they put their trust in me and the team to deliver this. It was a challenging, complex and unpredictable transaction for everyone involved, before you mention the emotional attachment of the family in relation to their business of more than half a century, and the current working and distancing restrictions. Andy, Neil and their team moved mountains to save as many jobs as possible, as well as doing all they could to ensure they rescued the pension scheme within exceptionally short timescales. It was a job that became more than just another transaction for the whole team at Harper Macleod and we were genuinely honoured to assist them.”
M&Co CEO Andy McGeoch said: “The resource and skill which Chris, Gordon and Tony were able to throw at this made all the difference. They have a terrific team of lawyers who, working as partners with us through many difficult days and nights, helped to deliver the outcome which saved so many of our stores and jobs throughout the UK.”
The financial restructuring exercise secured the company’s future as a national High Street presence. Following the start of the Coronavirus pandemic, which forced most UK retailers to close their doors for nearly four months, Mackays Stores Ltd in April took the necessary step of appointing Deloitte as administrators.
CEO Andy McGeoch said: “As everyone knows, retail has been one of the sectors hardest-hit by Covid-19, with long-term shop closures and social distancing having a hugely negative impact.
“Like many of the UK’s best-known High Street names, we’ve been facing up to a number of underlying business challenges in the current retail environment, which have been exacerbated by the impact of COVID 19. Being forced to close all our stores for several months meant a huge financial hit.
“We reopened most stores in June and have been exploring every possible option, but it was obvious that the business, as previously structured, would remain under severe pressure from the ongoing challenges of Covid-19. It quickly became clear that best way to save most jobs and most stores was to enter administration, with a new company acquiring the assets of the old business, and this process has now been finalised.
“It’s not a decision we took lightly, after more than 50 years of trading, but it gives us a sustainable basis from which to rebuild, with the majority of our staff keeping their jobs and 219 stores in High Streets across the country remaining open.
“The most difficult part of this process is undoubtedly seeing 385 colleagues in stores and at our Glasgow and London operations leaving the business. It’s a terrible situation for them and I’m desperately sorry that we couldn’t come up with a viable plan which would have saved all the jobs.”
In a recent Sunday Times survey, M&Co was voted 14th Best Large Company to work for in the UK. It was founded in 1961 and has expanded from its Scottish roots to towns throughout the UK.
With the coronavirus outbreak reducing appetites to travel longer distances on public transport, the company believes that its network of over 200 local High Street stores will play a major role in the company’s future performance.
Andy McGeoch said: “The response from our loyal customer base during lockdown was phenomenal. We had a steady stream of requests for updates, with some customers even posting letters through the doors asking when we were reopening. It’s hugely encouraging to hear our customers say how much they have missed us after months away.”