Intense competition and poor purchasing power brought down the company behind FreshXpress, the administrator in charge of handling the failed business has told The Grocer.

Stephen Clancy of Menzies Corporate Restructuring said the chain of 24 stores, bought from the Kwik Save estate after it went bust last year, had already been depleted to just nine trading stores when administrators were called in to handle the sale. These stores were sold on 21 March to a company called Ivybrim and are still trading.

Like FreshXpress before it, the stores are backed by the Murtagh family. Irish investor Brendan Murtagh helped to finance the development of FreshXpress after Kwik Save failed. Alan Murtagh was also a director of the failed FreshXpress Group. Having completed the deal, Ivybrim has since changed its name to FX Holdings.

Administrators are still calculating how much the chain's creditors, which include main supplier Costcutter, were owed when FreshXpress went under, but Clancy said he believed the chain of nine now had a fighting chance. "The management feel they have a group of stores capable of performing strongly and I think it's the locations that give them confidence those stores can perform strongly," he said.

The new business is being led by Andrew King, who has extensive retail experience, most recently as a consultant to Costcutter, with which it is understood there is a new supply agreement. The HQ has been closed and a new condensed team will lead the business from the Prescott store in Liverpool. This will reduce the costs that contributed to FreshXpress Group's problems.

The FreshXpress name is likely to die off as well. The stores will continue to trade under the FreshXpress fascia for the time being, but are likely to be changed to individual names in order to better suit their locations.

The nine trading stores comprise three in Liverpool, two in Birmingham, and one in Nottingham, Hull, Newport and Oswestry respectively and are all different in terms of size and customer demographic. It is thought individual names will allow the business to tailor its offer to each store.

Slashed costs and a new approach may help FX Holdings to succeed where FreshXpress Group struggled. "There is intense competition in retail generally," said Clancy. "We are finding that in a number of sectors beyond grocery. In terms of competition from the corporates, they have got larger purchasing power and greater strength in the marketplace. So what they are looking to do with FreshXpress is consolidate the better-performing stores in their particular localities."

Property experts at Menzies advised there was no value in the leases of any of the closed stores and these have been surrendered back to landlords.