Court hears survival plan for DIY chain B&Q
Updated: Tuesday, 12 Feb 2013 15:03
DIY chain B&Q has had expressions of interest from four investors along with its parent company, the Commercial Court has heard.
The court confirmed the appointment of an examiner to the chain following the appointment of an interim examiner last week.
The survival plan for the group includes the closure of two of its nine stores.
The outlets in Waterford and Athlone will close with the loss of 92 jobs.
Mr Justice Peter Kelly was told the chain's parent company Kingfisher is prepared to support B&Q throughout the examinership process and expressions of interest have been received from four other potential investors.
The judge said the application for the appointment of a full examiner was "both depressingly familiar and refreshingly different."
''The familiar aspects were the chain was bedevilled by falling revenue of 32.4% in the past four years and blighted by extraordinary rents which were estimated to be €5.8m above what current market rents ought to be. What was refreshingly different was the company had no bank or Revenue debts,'' he said.
However the judge said the company appeared to have a reasonable prospect of continuing to trade if a number of conditions were met, including store closures and cost restructuring.
B&Q operates nine stores in Ireland, employing 190 full time staff and 500 part time.
The court heard it has seen a drop in revenue of 32.4% in the past four years and has debts of €17.3m to its parent company Kingfisher.
The chain's revenue dropped from 124m for the year ending January 2009 to €84m in 2012.
Counsel for the company Rossa Fanning said the group would have been in trouble before now if it had been depending on banks, but because it was supported by a parent company there had been more latitude.
The company was now at a fork in the road, he said. After the closure of stores in Athlone and Waterford it was hoped the remaining stores could stay open but that would depend on successful negotiations on rental costs. The company was paying a total of €11.6m per annum in rent which was estimated to be €5.8m above current market rents.