MBL sheds 160 jobs after losing Morrisons’ deals

In April, MBL, which is based in Leyland, Lancashire, announced that its trading relationship with Morrisons had “ended with immediate effect by mutual consent”.

The supply contracts for DVDs and CDs had been due to end on September 14.

In the financial year up to March 31 2010, around 78 per cent of MBL’s turnover related to sales to Morrisons.

In a statement, MBL said yesterday: “The negotiations with Morrisons supermarket in relation to the contractual matters requiring resolution are continuing.

“While significant progress has been made by MBL in reducing the level of exposure to Morrisons in terms of debtors and allocated stocks, there remains a residual asset ‘lock up’, which is the subject of continuing work in progress and dispute dialogue.

“The board has been disappointed that a conclusion has not yet been reached and a further update will be provided with the preliminary announcement, which will be released on Thursday August 11, 2011.”

MBL said that the “downsizing” of the group’s operations had largely been completed.

The statement said: “Regrettably, this has resulted in a significant number of job losses with an overall reduction of approximately 50 per cent of the employee base.

“This will result in some exceptional costs being taken in the financial year to March 31, 2011.”

A spokesman for MBL said that most of the 160 job losses had been in Lancashire.

The company said that discussions were ongoing with regard to a proposed exit from MBL’s investment in U-Explore, which specialises in enabling schools to deliver careers information, advice and guidance, and its obligations in relation to the proposed lease of a new distribution centre.

“Again, the board expect to be able to report further on the outcome of these negotiations in the near future,” the statement said. ”The business continues to trade in line with the board’s expectations.

“The board is in the process of reviewing the detailed business plan based on the business activities and opportunities which presently prevail.”

A Morrisons spokesman declined to comment on MBL’s announcement.

The Yorkshire Post understands that Morrisons has hired a number of former MBL staff since the redundancies were announced.

Morrisons had awarded a three-year deal to MBL to supply CDs and DVDs in 2009, after the collapse of rival Entertainment UK.