Managing director Colin Graves told OLN: “We looked at it long and hard , but the figures didn’t add up. There were too many problems.”
A group of 55 franchisees has emerged as one of the firm offers made to the First Quench administrator for part of the business, which now seems certain to be broken up rather than sold to a single buyer. The franchisees’ bid involves a package to buy out their own stores ahead of any sale of the rest of the business.
KPMG has declined to identify any bidders for all or part of the business, but said it had received serious offers from “more than 10” parties interested in a substantial number of stores, by last week’s deadline for indicative bids. Preference is being given to offers for “high multiples” of stores.
These are being examined by the administration team which said it expected deals to be agreed or completed by the middle of next week.
Administrator Ian Corfield said it was unlikely that a deal would be struck for First Quench in its entirety, although it was possible there would be takers for some of the loss-making stores already identified for closure, once the more profitable stores had been claimed by favoured bidders.
He added: “If someone came in with a knock-out offer for the whole thing then obviously we’d go with that. We’ve had some people looking at 20, 30 or 40 stores, and others wanting to take 200 or 300.”
He said that further store closures were possible ahead of any sale, on top of the 373 already earmarked to shut by early December.
As supplies dwindle, Corfield said it was inevitable that more stores would slip into loss-making.
“We have placed orders with some suppliers,” said Corfield, though preadministration warehouse stock is still tied up, pending a creditor’s claim from logistics company NDL.
Bakery group Greggs is understood to be a definite bidder for a package of stores to expand its business.
Greggs is on an expansionist footing, having said it sees the potential for 600 new stores. A Greggs spokesman declined to comment on a First Quench move.
Costcutter had been a favourite after Graves went public on the company’s initial interest.
Majestic boss Steve Lewis also ruled out a move for all or part of First Quench.
The Co-op is not thought to be interested having recently bought Somerfield. A small number of First Quench stores could revert to Whitbread, the one-time owner of Thresher, under the terms of a previous sale deal.
A Whitbread spokesperson said the number “isn’t thought to be significant”.
The decision by administrator KPMG to close 373 loss-making shops by December 2, leaves just 829 shops on offer to potential buyers.