Stores’ chief blames Co-op for collapse

Hailed as the first mid-sized supermarket chain in the UK for 27 years, Haldanes burst on to the retail scene in November 2009.

Starting out with four Somerfield stores in Scotland acquired from the Co-operative Group, the company, led by Scarborough-born businessman Arthur Harris, carried the strapline ‘Refreshingly Local’ to highlight the fact that 35 per cent of the products sold would be sourced from local producers.

Mr Harris invested £60,000 per store on rebranding and IT. He predicted turnover would grow by three per cent a year, with sales per store between £1.4m and £7m, depending on store size, by year three.

But Haldanes Stores, which is based in Grantham, Lincolnshire, didn’t even make it to year two.

Last month, it went into administration with more than 600 jobs lost and reported debts running into millions of pounds.

Mr Harris previously fronted the East-Midlands based holding group, Y50.

The firm was the umbrella company of petrol station owner Dolphin Retail before the sites were closed in 2009 after running into difficulty with the banks.

Haldanes stores took advantage of the opportunities arising after the Co-op agreed to offload 133 outlets following its takeover of Somerfield.

The first store to begin trading under the Haldanes brand was at Prestonpans, near Edinburgh, followed by two others near the Scottish capital, and one in Lanarkshire.

By January 2010, the company had acquired 26 stores across England, Scotland and Wales, including one in Pontefract, and Mr Harris had announced his vision to become a £100m business with 50 stores.

Haldanes sold two of its stores in the summer of 2010.

In January this year, Mr Harris decided to launch another new venture after acquiring 20 Netto stores from Asda for its discount UGO brand, half of which are based in Yorkshire.

Haldanes promised to spend £2m on converting the stores, which it bought for an undisclosed sum, to the UGO – pronounced You Go – brand.

At the same time, Haldanes acquired a petrol forecourt and a convenience store with a post office, branded Haldanes Xpress, meaning that the Haldane Retail Group now had three brands.

In April, the group acquired Woodhead Bakery and 11 of its retail outlets from its administrators under the name Bakery Products, a wholly owned subsidiary of the Haldane Retail Group.

But weeks later, Haldanes Stores came crashing down when Mr Harris decided to seek an administration order for the supermarket chain, and Brendan Guilfoyle and Chris White, of Sheffield-based P&A Partnership, were appointed joint administrators.

The firm closed all but three of its supermarkets. The final three shut last week.

The administration does not affect Haldane Retail Group, UGO Stores, Haldanes Express and Bakery Products, which are trading as usual.

So what went wrong? Mr Harris blamed the Co-operative Group for its financial problems, attributing its issues to the larger rival’s alleged unwillingness to renegotiate contracts on the stores, which Haldanes acquired.

Haldanes issued proceedings against the Co-operative Group in May.

Mr Harris said at the time: “The directors and I are devastated at having to take this step and our thoughts are with our employees who find themselves facing an uncertain future; we would like to publicly thank them for their efforts and loyalty during their time with Haldanes.”

He added: “We have made countless attempts to negotiate with the Co-operative Group over the last nine months, all to no avail.

“I am absolutely distraught that it has come to this. We firmly believed that the Co-op would at least sit down with us and hear what we had to say, but they have chosen to either ignore or refuse all of our requests to meet. This has left us with nowhere else to go.”

The Co-op argued that Haldanes was “substantially indebted” to the group owing to its failure to pay rents and said it would contest any legal action “vigorously”.