First Quench Retailing, the troubled owner of the Threshers off-licence chain, collapsed into administration last night, leaving 6,500 employees facing an uncertain future.
FQR – which operates the 1,300 Threshers, The Local and Wine Rack chains – said it was seeking a buyer for the business, but the administration is likely to lead to a large number of store closures.
The off-licence group has been battling a stock crisis in its stores this year after credit insurers scaled back cover for suppliers, as fears grew over its future. FQR made a £30m loss last year, but it has been struggling for some time against fierce competition from the supermarkets and hefty high street rents.
In terms of store numbers, it is the biggest retail administration since Woolworths, which had 800 stores, collapsed at the end of 2008.
FQR, which is owned by the private equity firm Vision Capital, appointed KPMG as administrators last night. The group said on Wednesday it was working with the accountancy firm on a number of restructuring and strategic options.
Last night, an FQR spokeswoman said: "The board's discussions with KPMG confirm that the best prospects for the business is a sale as a going concern, thereby preserving as many jobs as possible." Many of the group's 6,500 employees are part-time. She added: "The administrators have confirmed that they will be seeking to operate the business as normal whilst seeking a sale as a going concern, and this will include meeting next week's payroll."
Threshers' franchisees have complained bitterly that a lack of stock has left them with empty shelves and a crippling shortfall in sales this year.
Retail Week, the trade magazine, reported that the group wants to ditch about 600 stores and get rid of The Local chain.
This month, FQR hired John Cleland, the former chief operating officer of Somerfield, as a non-executive director to the board. Speculation is mounting that a team led by Mr Cleland is interested in buying back a radically slimmed-down version of the business.
The FQR spokeswoman said: "It is with great regret that the board was not able to brief our colleagues prior to it being made public in the media. This was always our intention but, unfortunately, the news leaked."
Vision Capital bought Thresher Wine Holdings in July 2007 for £95m.Reuse content