Superquinn Latest Casualty Of Irish Economic Woes

Iconic Irish supermarket chain Superquinn has been placed into receivership by a syndicate of banks who are owed more than €400 million by the company.

Musgraves, a an Irish-owned group which already operates under the SuperValu, Londis and Mace brands in Ireland, has agreed to buy Superquinn for an undisclosed sum, pending the approval of the competition authority.

The takeover appears to secure the jobs of the 2,800 people employed at Superquinn's 24 stores around the country.

However, it appears that the supermarket's suppliers, who are owed in the region of €51m, may have to settle for half that amount.

Superquinn chief executive Andrew Street initially agreed to stay on with the company through the takeover, but quit three days later citing difficulties with how the receivership was being handled.

In an email to senior colleagues, Mr Street said the board of Superquinn did not agree with the approach being taken by the banks which was being done at considerable cost to suppliers.

"Over the last few days it has been distressing to see queues of suppliers in our reception waiting for to see if they will be paid and in many cases, being turned away empty handed by the receiver," Mr Street said in an email.

"I had hoped to steer the company out of its difficulties and into calmer waters and although we have made considerable progress together over the last few months, I will now not be able to complete this task."

The company was set up in 1960 by Fergal Quinn, and competed with larger and international rivals being focusing on the top end of the market.

Quinn is considered by many in the retail business as one of the smartest business brains in the world.

Superquinn remained in the family's hands until 2005, when it was bought by a consortium called Select Retail Holdings for a reported €450 million.

However, despite annual sales at its 24 stores of around €500m, its owners were not able to meet their repayment requirements on that massive outlay.

Since the recession hit home, its market share has fallen considerably, as customers seek out cheaper alternatives.

The new owners have promised to focus on better value for shoppers.

"Musgrave, which is an Irish family owned company, will use its significant brand expertise to develop the Superquinn business by investing in the stores and bringing value to the Superquinn shopper," it said in a statement.

"Superquinn has been challenged by the scale of its debt burden and the difficult trading environment.

"Musgrave already has a strong commitment to Irish suppliers which helps support 14,000 jobs across 600 supplier companies and contributes €2.9bn to the Irish economy. Musgrave is committed to providing existing Superquinn suppliers with the opportunity to continue to supply Superquinn stores."