Troubled discounter Ugo sold to ‘established national name’
Ugo Stores has been sold by owner Arthur Harris, The Grocer can reveal. The 20-store discount chain, which opened its first store in last February, was sold to “a well-known and established brand name”, Harris said.
Serious doubts were raised this week over the chain’s future after it emerged that its major supplier, Nisa, had stopped delivering to the chain more than a week ago.
Users of www.larkhall.biz/haldanes, a website forum set up following the demise of Ugo’s sister company Haldanes Stores, claimed the chain’s 20 stores were running seriously low on stock. One user posted a number of images of an Ugo store “in the north” with empty shelves and signs had been put up in stores saying “25% off everything”.
Harris revealed he had been in discussions with a “national retailer” between September and January that had “expressed an interest in acquiring a major shareholding and substantially investing into the business”. However, the deal fell through last month.
“This left Ugo in a very difficult trading position,” Harris said. “Since then it has been mine and my management team’s sole mission to ensure the jobs of the store workers were secured.”
He added: “Subject to legals being completed, all the stores traded by Ugo will transfer into new ownership of a new operator. This operator is a well-known and established brand name. All store staff will transfer under TUPE to the employment of that operator.”
Harris warned there would be redundancies at head office because “the new operator does not need any new infrastructure”, but said he hoped to transfer staff to his other businesses.
“I believe there is very strong evidence to show that the sector has worsened dramatically since we embarked on the Ugo journey a year or so ago,” he said. “It was always going to be a challenge but one I feel we would have achieved in normal trading conditions.”
Ugo launched in a blaze of publicity last January after Harris snapped up 20 Netto stores from Asda. The first store opened in February last year and the remainder were opened by May. However, two Ugo stores were forced to close when Haldanes Stores collapsed into administration in June last year with debts of £8.6m.