Examiner appointed to B&Q stores
The High Court has confirmed an examiner to B&Q Ireland Ltd, which operates nine home improvement stores employing 690 people, of whom 500 are part-time workers.
As part of further cost-cutting proposals, the company’s two stores in Athlone and Waterford would close with the “regrettable” loss of 92 jobs, Mr Justice Peter Kelly noted.
A key ingredient for the survival of some of the company’s other stores includes renegotiation of what he described as “extraordinary” rents. The rent roll for the nine stores is €11.6 million a year, some €5.8 million above market rates, the court heard.
Declan McDonald, who was appointed interim examiner late last month, had been encouraged by expressions of interest from four potential investors in addition to the company’s parent, Kingfisher plc, Mr Justice Kelly was told.
Rossa Fanning, for the company, presented letters to the court in which Kingfisher, owed some €17 million by the company, indicated it was prepared to support the company through the examinership process and to invest in it on certain conditions, including implementation of a cost-cutting programme and the successful negotiation of a survival scheme.
Kingfisher wrote to the company late last month saying the business was not sustainable and the levels of support required was no longer feasible.
It also indicated it would provide financial support to the company if it was under court protection so as to enable it meet the cash flow projections in an independent accountant’s report and it would be interested in making new investment in a restructured business of the company.
The judge said the situation had aspects which were both “depressingly familiar” and “refreshingly new”.
It was depressing familiar in that it was “bedevilled” with a fall of some 34 per cent in revenue since 2009 and it was also obliged to pay “extraordinary” rents. Its turnover had fallen 24.2 per cent from a peak €124 million in 2009 to some €94.2 million in the financial year to end January 2012.
The refreshingly new aspect was that the company had no bank debt and had no arrears to the Revenue, he said. He was satisfied the company, provided certain conditions were met, had a reasonable prospect of continuing to trade.