Superquinn Into receivership

dfbemt

RTE reporting that Superquinn have called in the receivers.

Debts of €400m and nearly 2,800 jobs at risk.

Holy s**t

efb

Not surprised. Recon Dunnes is threading water too.

RobbieTheRobber

link from RTE
http://www.rte.ie/news/2011/0718/superquinn.html

Scofflaw

Superquinn's had quite a troubled recent history:

The backers of Superquinn have approached a number of rival retailers and finance houses to ask if they would be interested in taking over the chain.

The approaches are understood to have taken place in recent weeks, but Superquinn has received no expressions of interest to date.

The supermarket chain is controlled by a consortium known as Select Retail Holdings. Simon Burke, Kieran Ryan, the property developer Jerry O’Reilly, property consultants David Courtney and Bernard Doyle, and the hotelier Terry Sweeney are all behind the group.

Developer Bernard McNamara was also part of the consortium at one point, but was later bought out. Select Retail Holdings bought Superquinn in 2005 from its founder Feargal Quinn in what was reported to be a €450 million deal.

The company has had a number of changes at board level in recent months. Simon Burke, who headed Superquinn after its purchase, stepped down in February.

He was replaced as chairman by fellow shareholder Kieran Ryan. Burke had been executive chairman of the firm until late last year. When he moved to a non-executive role, he was replaced by former Dunnes director Andrew Street, who is now chief executive officer.

The consortium has already sold some assets of the group. In 2007, it sold six stores in a sale and leaseback deal to Friends First for €142.5 million.

In 2009, the company announced that it was closing its Dundalk store and cutting 400 jobs across the group. The firm cited difficult trading conditions and cross-border shopping as the reason for the move.

It closed its Naas store in January after its lease expired and the landlord demanded possession. The company had planned to build a new store in Naas, but had not moved forward on the plans at the time of the closure.

Last year the company wrote down the value of the group’s properties by almost €180 million.

http://www.sbpost.ie/news/ireland/superquinn-owners-seek-buyer-56047.html

cordially,
Scofflaw

SBWife

Given the valuation paid to Fergal Quinn and it's predication on 2005 property values and cash streams including the redevelopment of the Blanch site (to include apartments, etc., etc., blah, blah, blah) it was only a matter of time before the interest payments sucked the remaining life out of the business.

Anyone who shops the less than prime stores (my mother frequents Castletroy) will have noticed a market deterioration in product choice and inventory levels over the past 18-24 months.

All in all while not a surprise it's sad to see what was a vibrant business under the previous ownership (and without the debt burden) end up in this condition. Dunnes is obviously under some pressure due to the economic downturn but doesn't have the leveraged structure which IMO broke Superquinn.

Devilman40k

It's like the 80's all over again,I remember Tesco and H.Williams closed back then, I wonder if Dunnes are likely to follow suit or will they start a series of price wars which they used back then!

Mr. Presentable

Devilman40k wrote: »

It's like the 80's all over again,I remember Tesco and H.Williams closed back then, I wonder if Dunnes are likely to follow suit or will they start a series of price wars which they used back then!

Quinnsworth/Powers?

Devilman40k

No Tesco were here in the 80's and ran with their tails between their legs, Quinnsworth (later Crazy Prices later Tescos (again)) grew on the back of this

beagle001

Dunnes are going nowhere,they are making decent money the past 4 years and have been able to challenge their rivals with strong growth and competition.
The ones that are next in line are super valu and centra,they are only really doing a turnover on select stock as people are shopping more and more in the bigger chains to keep costs low.

Sand

Its sad but not surprising - neither of the recent governments has ever been able to even begin to formulate a strategy for economic recovery. Its been banks, banks, banks since 2008 - everything else has been ignored in the quest to revive the zombie banks.

Hopefully the company can emerge from the receivership as a going concern.

dvpower

efb wrote: »

Not surprised. Recon Dunnes is threading water too.

Wasn't it property investment rather than the core business that is bringing down SQ?

gpjordanf1

beagle001 wrote: »

Dunnes are going nowhere,they are making decent money the past 4 years and have been able to challenge their rivals with strong growth and competition.
The ones that are next in line are super valu and centra,they are only really doing a turnover on select stock as people are shopping more and more in the bigger chains to keep costs low.

I believe The Musgrave Group made €72+ Million profit last year and payed off all their outstanding loans? Seem pretty solid to me?

http://www.irishtimes.com/newspaper/finance/2011/0429/1224295674992.html

xoxyx

SBWife wrote: »

Anyone who shops the less than prime stores (my mother frequents Castletroy) will have noticed a market deterioration in product choice and inventory levels over the past 18-24 months.

Try the Heuston South Quarter ("HSQ") store. Went there recently for the first time, and it was missing everything that makes Superquinn ("SQ") a bit different!

It's an unfortunate placing for SQ seeing as how HSQ hasn't realised the potential that it was supposed to - back in the good days. SQ has always been one of my favourite supermarkets, but, the fact that the HSQ one was so poorly maintained means I won't be going there again. Vicious circle I suppose.

If it does go, it will be a loss for us. I always enjoyed wandering around SQ, checking out the meat and cheese counters, and picking up stuff that I couldn't get elsewhere (Forest Feast brand springs to mind). You may spend a bit more money in SQ than in Lidl, and I'm trying to save money on groceries as much as the next person, but, it was nice to have the option.

Oh well. Another nice thing bites the dust. And it won't be the last in this downward-spiraling country.

Bluefoam

efb wrote: »

Not surprised. Recon Dunnes is threading water too.

Wow, uneducated speculation is rife. Did you come up with this theory by talking to your local checkout girl?

Shame about SQ, they were once a truely innovative supermarket. Respected throughout the world.

efb

Bluefoam wrote: »

Wow, uneducated speculation is rife. Did you come up with this theory by talking to your local checkout girl?

Shame about SQ, they were once a truely innovative supermarket. Respected throughout the world.

No, watching how bad the Dunnes Stock levels appear on their shelves across Ireland, the minimal amount of staff visible and the renogatiated managers contracts.

Hope they settle their debt with Revenue over the plastic bags soon...

Ally Dick

In any of the Superquinns that I have been in of late, the standards have definitely slipped. Feargal needs to do a "Retail Therapy" special on his former supermarket - ironically enough !

gowley

beagle001 wrote: »

Dunnes are going nowhere,they are making decent money the past 4 years and have been able to challenge their rivals with strong growth and competition.
The ones that are next in line are super valu and centra,they are only really doing a turnover on select stock as people are shopping more and more in the bigger chains to keep costs low.

who are the bigger chains???? tesco have the largest market share by about 2% and ther is never more than 1% between dunnes and s valu often with sv ahead

Happy Snappy

Superquinn's troubles have been well known in the retail industry for sometime.

Rumours have been circulating for over a year & they came quite close to receivership a year ago. However this passed. Earlier this year a warning was issued to suppliers by Euler Hermes(credit insurers). This was followed by reduced limits. Eventually cover was withdrawn. So this Im sure put a squeeze on Superquinn's finances. The business itself is supposed to have a healthy turnover with most of the shops trading quite well but the debts that the owners have burdened the company with are too high!

I heard recently that Fergal Quinn is sniffing around & offering a fraction of what he was paid. Quite a move if it proves to be true!!

gowley

efb wrote: »

No, watching how bad the Dunnes Stock levels appear on their shelves across Ireland, the minimal amount of staff visible and the renogatiated managers contracts.

Hope they settle their debt with Revenue over the plastic bags soon...

thats rubbish.Tesco are the market leaders but dunnes fluctuate between second and third and are only about 3% behind tesco with approx 23% market share.Superquinn had less than 6% lately and had been overtaken by lidl and aldi

thebman

Sand wrote: »

Its sad but not surprising - neither of the recent governments has ever been able to even begin to formulate a strategy for economic recovery. Its been banks, banks, banks since 2008 - everything else has been ignored in the quest to revive the zombie banks.

Hopefully the company can emerge from the receivership as a going concern.

What could the government do for them though?

They are a private company and there is competition out there doing quite well still so I imagine the problem is within the company.

As far as I know it views/viewed itself as an upper market shopping centre. No real surprise seeing it in decline in a recession.

It is sad to see these jobs go if they do but the likes of Lidl/Aldi have been expanding as the market is going there way, toward cheaper, budget brands so it isn't unexpected.

Voltex

Its simple...shop in SQ and spend €70 you leave with 2 shopping bags!! Go to Aldi or Lidl and spend €70, you need a light commercial to bring your shopping home!

Happy Snappy

thebman wrote: »

Sand wrote: »

Its sad but not surprising - neither of the recent governments has ever been able to even begin to formulate a strategy for economic recovery. Its been banks, banks, banks since 2008 - everything else has been ignored in the quest to revive the zombie banks.

Hopefully the company can emerge from the receivership as a going concern.

What could the government do for them though?

They are a private company and there is competition out there doing quite well still so I imagine the problem is within the company.

As far as I know it views/viewed itself as an upper market shopping centre. No real surprise seeing it in decline in a recession.

It is sad to see these jobs go if they do but the likes of Lidl/Aldi have been expanding as the market is going there way, toward cheaper, budget brands so it isn't unexpected.

Completely agree.. superquinn is being run by builders.. not retailers. This is where the issue lies.

People used to be embarrassed to shop at the discounters but now it's where the savvy shoppers go and Lidl are fitting bakeries which I think will be great.

Someone will buy Sq at a good price and it will be business as usual only the noose of huge debt will be removed.

Sleepy

Any bet says Quinn picks it back up for a song...

And fair play to him if he does.

dfbemt

There must be huge concerns for the suppliers to SQ, especially the producers of items that you wouldn't find anywhere else. Lots of small Irish food producers supplied SQ and this was really what they were good at......... and their sausages and breads.

Big concerns for many

dublinbusdude

Superquinn has to be sold and Adsa or Sainsburys might be coming to town near you!!!

nesf

Moved. Should be in Irish Economy.

thebman

Happy Snappy wrote: »

Completely agree.. superquinn is being run by builders.. not retailers. This is where the issue lies.

People used to be embarrassed to shop at the discounters but now it's where the savvy shoppers go and Lidl are fitting bakeries which I think will be great.

Someone will buy Sq at a good price and it will be business as usual only the noose of huge debt will be removed.

Local Lidl has a bakery in it. Baguette for 70c and it is as good as any of the other in store bakeries, just cheaper.

femur61

I agree is more expensive and shop deteriorated but on the news it said was due to failed property deals. didn't they buy a hotel during the boom in dublin and the stores them selves are worth only a fraction of what they were.

touts

According to Newstalk Musgraves just bought them so if Supervalu are anything to go by a shop in Superquinn won't be getting any cheaper.

Good news for the staff though.

cyclopath2001

femur61 wrote: »

I agree is more expensive and shop deteriorated but on the news it said was due to failed property deals. didn't they buy a hotel during the boom in dublin and the stores them selves are worth only a fraction of what they were.

Musgraves are buying them, hopefully minus the property baggage, sounds like a good outcome.

deelite

I wonder will the new SQ shops become a warehouse type of store - where you buy in bulk and get huge discounts (Like in the USA).

Sticky_Fingers

deelite wrote: »

I wonder will the new SQ shops become a warehouse type of store - where you buy in bulk and get huge discounts (Like in the USA).

While I would love to see it happening I doubt they will since it would probably end up hurting their Centra and SuperValu operations.

monkeybutter

In fairness, superquinn might have slipped slightly, but it's still miles ahead of all of the other super markets.

Lidl and Aldi are a disgrace, the quality of their food is atrocious. You might buy detergent etc there, but nothing else. I'm willing to spend 10 euro more on a trolley of 70 euro to get something edible.

Tescos are so bad I haven't been there is years, badly stocked, poor choice, terrible to staff.

The only ones who hold a candle to superquinn is the odd Supervalu Franchise, they seem to have more freedom than the other brands and a few have taken it upon themselves to up the standard.

borderlinemeath

There will be job losses - maybe not in Superquinn but more likely in Centra/SV locations that are adjacent to the Superquinn stores.

Take Ranelagh for example. Superquinn opened there a few years back, right across the road from Centra. I don't forsee the likes of Centra trading in locations like this for very much longer.

murphaph

monkeybutter wrote: »

Lidl and Aldi are a disgrace, the quality of their food is atrocious.

Wtf? It's fine. A lot of it is made by brand name manufacturers btw

Seems the Celtic Tiger is alive and well in some households.

mvt

monkeybutter wrote: »

In fairness, superquinn might have slipped slightly, but it's still miles ahead of all of the other super markets.

Lidl and Aldi are a disgrace, the quality of their food is atrocious. You might buy detergent etc there, but nothing else. I'm willing to spend 10 euro more on a trolley of 70 euro to get something edible.

Tescos are so bad I haven't been there is years, badly stocked, poor choice, terrible to staff.

The only ones who hold a candle to superquinn is the odd Supervalu
Franchise, they seem to have more freedom than the other brands and a few have taken it upon themselves to up the standard.

Don't think you know what you're talking about.If you have something to say could you provide some examples?

RichardAnd

monkeybutter wrote: »

Lidl and Aldi are a disgrace, the quality of their food is atrocious. You might buy detergent etc there, but nothing else. I'm willing to spend 10 euro more on a trolley of 70 euro to get something edible.

Some Lidl food is dreadful yes but by and large, it's fairly decent for the most part. This however, is true for many super market chains. Tesco for example, have absolutely dreadful meat on their shelves.

thebman

For the most part, I think Lidl have upped their food quality a lot since moving into Ireland. When they first got it here, some of it wasn't great but now most of it is fine.

seamus

dvpower wrote: »

Wasn't it property investment rather than the core business that is bringing down SQ?

They'd actually been in odd finances for quite some time.

In mid-2006 the management told the staff that the current business was unsustainable; many of the shops were painfully out of date, and they were haemorraghing customers badly to the likes of Tesco. They embarked on a programme of rebranding, refurbishing most of the shops (though some were to be sold because they were too old for a refurb) and reinventing SQ as a "premium" supermarket focussing on good food and customer care, taking a market position alongside M & S rather than trying to compete with Tesco, Aldi or Lidl, who are behemoths in comparison. SQ's always been a popular brand on the east coast, but they've never been a huge company.

Then of course the recession hit. The value of the owners' investment plummetted, they found it much harder to secure finances to continue the refurbishment programme, but most importantly the "premium" label became worthless because people are no longer prepared to spend big money on a brand name when an equivalent no-name is available. There seemed to be something of a scramble to try and rollback part of the rebranding and get back into competing with Tesco and Dunnes on price, but it's been apparent for at least a year that stock quality and levels were suffering at the squeezed margins.

They're not actually much more expensive than other shops. The primary difference is that their stock tends to be more varied. So you buy the basic stuff in Lidl/Aldi/Tesco and get a good tonne of stuff for €70, you have to go into Superquinn to buy specialist (and therefore expensive) products, and come out with two bags costing €70 and you feel like you've been reamed.

I worked it out one time over two weeks - the first I got what I could in Lidl and everything else in Superquinn. The second I got everything in Superquinn. It came out about a fiver more expensive. So it's a fiver people would prefer in their back pocket, but it's not the astronomical expense that people associate with SQ.

borderlinemeath

There's nothing wrong with Lidl/Aldi food for the most part. There's plenty that's on par with branded food and certain stuff that is just tastless/not to my palette.

I wouldn't buy prepacked meat in Lidl/Aldi. I wouldn't buy prepacked meat in Tescos either and Dunnes only at a push and I was stuck.

Butchers meat is just far superior to prepacked supermarket meat, I wouldn't skimp on it.

dfbemt

dfbemt wrote: »

There must be huge concerns for the suppliers to SQ, especially the producers of items that you wouldn't find anywhere else. Lots of small Irish food producers supplied SQ and this was really what they were good at......... and their sausages and breads.

Big concerns for many

Covered on RTE News at lunchtime.

Sounds to me like the suppliers who are owed in the region of €100m will have difficulty in getting paid.

There will be casualties somewhere unfortunately

Slideshowbob

So SQ was sold to Musgraves for an undisclosed sum.

Anyone hazard a guess what it went for?

Was it sold as just a business or with the properties also!?

Longines

Not disclosed but prob 70 to 90 million. The property question is not clear either as the previous owners made such a mess of things

Slideshowbob

Longines wrote: »

Not disclosed but prob 70 to 90 million. The property question is not clear either as the previous owners made such a mess of things

How can you say it went for 70-90m???

Is that that just a shot in the dark??

Corsendonk

I can see SuperValu just absorbing SQ like the way Morrison's absorbed Safeway in the UK, with stores rebranded SV and stores that compete against SV closed down. SQ has been in decline even before Fergal stopped shoving jam doughnuts in the face of every kid that walked in the door.

They were always so much better at marketing than there competitors, marketing stories such as the organic farm that they owned that was going to supply the SQ stores with Irish organic veg but they actually didn't own the farm or go ahead with the project. Or Irish grown cantaloupe melons that they got grown at huge cost and that tasted terrible but got them a photo op in the papers.

Considering that its quite a small industry in Ireland some of the existing SQ commercial team are actually ex-Musgraves so that should transfer smoothly. Are the depots included in the staff that were saved or was that just store staff? No point continuing with two separate Central Distribution Centres and fleets.

tweedledee

We need ASDA to come in and kick ass.They are a quality product with low prices.;)

donkey balls

I don't think the number of staff included the distribution guys based at the Dublin depot Superquinn have the transport&warehousing farmed out to an English management company,Also Musgrave have other brands apart from the centra/supervalue operating under there own brand so it could be possible that Superquinn will remain under it's own brand.

Skrynesaver

tweedledee wrote: »

We need ASDA to come in and kick ass.They are a quality product with low prices.;)

Low prices I grant you, but quality comes in two flavours and theirs is very low indeed.

As the European arm of Wallmart, ASDA stands for even more out of town sprawl and the destruction of indigenous retailing.

borderlinemeath

tweedledee wrote: »

We need ASDA to come in and kick ass.They are a quality product with low prices.;)

I'm suprised this thread got to 50 posts without somebody bigging up the UK competition. :rolleyes:

The main reason that SQ went bust is bad management by property developers rather than retailers, but a huge thorn in the side of Irish retailing is the massive increase in cross border shopping. It would have done massive damage to the likes of SQ, an indiginous Irish company that didn't have the clout of Tesco when the recession really kicked in.

I understand the mentality of people who are really on the breadline having to travel to get food at a cheaper price, but most posts and discussions about shopping in Sainsburys/Asda were all about the cheap booze. A real "necessity" in a recession. :mad:

Brazilmorgyn

efb wrote: »

No, watching how bad the Dunnes Stock levels appear on their shelves across Ireland, the minimal amount of staff visible and the renogatiated managers contracts.

Hope they settle their debt with Revenue over the plastic bags soon...

I blame the self service checkouts ! But really, its Sneaky to liquidate the company, no need pay suppliers then musgrave buy stores and suppliers can get stuffed, underhanded dealings again in business ,

Good loser

Why didn't Musgraves discount the price paid the receiver sufficient to pay the suppliers for all goods delivered in ?