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Stores to close despite Elverys' MBO rescue

Irish sportswear chain Elverys may close up to seven stores under a management buyout deal to rescue the retailer, but none of its 700 staff are expected to lose their jobs.

The Elverys management team, led by chief executive Patrick Rowland, was named as the preferred bidder for the business last week, having received new investment through corporate finance house Capnua and Allied Irish Bank. The group saw off competition from Sports Direct owner Mike Ashley and US restructuring firm Hilco. 

Five stores at undisclosed locations are now set to close, with two others under “serious review”, according to court-appointed examiner Simon Coyle of accountants Mazars.

Coyle told Drapers the closures had already been planned before Elverys went into administration in February and employees of the shops involved would be “absorbed” within the company. Elverys currently has 56 stores across the Republic of Ireland.

The two stores under review, of which Coyle would only say they are in rural areas, may be relocated if rent deals cannot be agreed with their landlords.

He said: “If landlords aren’t prepared to face the commercial reality of rents at the moment there is a compelling argument to move stores into cheaper premises adjacent to the old stores.”

The MBO now has to be approved by the Irish High Court before Elverys can officially be bought out of examinership. The process is expected to last 40 days.

Elverys has been on the market for some months as its owners, John and James Staunton, try to settle debts with Ireland’s National Asset Management Agency.

Sports Direct chief executive Dave Forsey previously said acquiring the Irish chain would be an “excellent strategic fit” for the company in order to strengthen its foothold in Ireland.  

 

 

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