BWG Holdings, owner of the Spar franchise, is seen as the most likely buyer of some of Iceland’s Irish stores, after the company’s decision to close down operations in the Republic because of continuing losses.
Seven outlets - six in Dublin and one in Letterkenny, County Donegal - are involved and the company, as well as the shopworkers’ union, Mandate, wants any buyer to retain the 160 staff set to lose their jobs. Iceland has agreed to pay their wages until September 15 while efforts to find a buyer go on.
Irish trade sources believe the stores are likely to be broken up rather than sold as a single unit. While all the established players in the sector are remaining silent on their intentions, discounters Lidl and Aldi, actively searching for sites, could be interested and so too could the Mugrave group, owner of SuperValu and Centra.
But the most likely bidder, according to sources, is BWG, which may see some of the locations as suitable for the larger Eurospar stores that have been the focus of its recent expansion plans. However, one disadvantage for all prospective purchasers is that the outlets offer limited parking facilities.
Iceland staff got just 24 hours’ notice of the closure. Later a company spokeswoman explained: “Our operation in the Irish Republic is losing money and we can see no prospect of that changing. We cannot afford to sustain the losses any longer and have reluctantly decided we have no alternative but to cease trading.”
The company announced a special ‘two for one’ offer in all its stores, telling staff it will close when stock is cleared, though they will continue to be paid till the middle of next month.
Meanwhile, RGDATA has blamed the closure on a combination of “intense competition” in the Irish market and high operating costs.