It's not quite phoenix from the ashes stuff. But last week Irish property tycoon Brendan Murtagh signalled that there will be a future for at least some of the old Kwik Save stores now that the chain is in administration.

The Grocer can confirm that having cherrypicked 56 of Kwik Save's 251 stores as part of an £18m 'pre-pack' administration deal, Murtagh plans to sell off 32 and retain 24, which will be renamed FreshXpress. Located mainly in the north, the Midlands and Wales, these represent the cream of the crop in terms of location and demographic, he believes. But just what does he have in mind for the new entity? And, more importantly, will suppliers play ball with Paul Niklas still at the helm?

Murtagh is co-founder of construction group Kingspan and also the largest shareholder in the fast-growing property company Howard Holdings. Last month he sold one-third of his holding in Kingspan, netting him €48m (£32.4m) to fund the transfer of stores to FreshXpress.

He is keeping his plans under wraps, including the locations of the 24 stores, but experts predict FreshXpress will adopt a more conventional c-store format than its predecessor, with Spar and Costcutter its closest competition. It will also have to adopt a different pricing ethos to counter its lack of scale, they suggest.

"It only has a small number of stores so has no ability to buy at anything like the cost of the big players, so re-emerging as a discounter is unlikely," says one analyst. "It would have to take a much lower gross margin or sell at a substantial premium to rivals."

Murtagh is jointly listed as the 11th-richest man in Ireland with his brother Eugene and could bankroll the chain's buying activities up-front, but analysts believe it will hook up with a buying group because of its lack of critical mass. Another challenge for the chain is overcoming the legacy of Kwik Save.

Top of Murtagh's and Niklas' to- do list will be building bridges with suppliers, many of whom were left with unpaid bills. Arla claims it is owed £60,000, for instance, and Barnsley-based fresh produce supplier John Dennis ceased trading this week, blaming its insolvency on the bad debt left by Kwik Save. The general consensus among other suppliers is that they need to proceed with caution.

"We had been supplying Kwik Save cash up front," says a spokesman for Key Lekkerland. "We haven't been approached by FreshXpress yet, but if we are we would need to take a close look at the investors."

FreshXpress must also work hard to regain staff trust. Loyal employees worked six weeks without pay to assist the re-financing project but only a small number of jobs have been saved and hundreds are now fighting for back pay and redundancy money.

Usdaw says FreshXpress employees will join with the same terms and conditions they had at Kwik Save and that the company has made a commitment to pay its new staff any back pay. It wants an urgent meeting with the new company to examine its business plan.

Of course this is good news for those working at the 24 stores. As for the 32 stores Murtagh is trying to sell, Tesco, Sainsbury's and The Co-operative Group are said to be in the running. What will happen to the remaining estate is less clear, although some are expected to remain food stores.

Administrator KPMG has appointed property agents King Sturge to sell the leases to the remaining 195 stores. Marks & Spencer and Poundland have already confirmed they're scrutinising the portfolio. The latter thinks there is potential to grow its retail estate by 75 stores in the next three years. But those hoping to pick up a bargain could be disappointed.

There will be no leases for discount prices, insists King Sturge. "Obviously Kwik Save is in administration so we want to sell them as quickly as possible. However, these are all premium retail units and we are inviting quality offers."

Despite the appetite in the grocery market for acquisitions, some experts are sceptical about the portfolio's appeal, however. "I can't see many people being interested," says one analyst. "The hard discounters have taken what they wanted and now Murtagh has the best of the rest. These stores are compromised. Part of this is due to the operating structure of Kwik Save but it's also down to poor locations and outdated premises."

Of course, finding takers for the 195 stores is not Murtagh's concern. What he will be worried about is FreshXpress' ability to undo the legacy of its predecessor.nlocation, location

Brendan Murtagh has hived off 56 stores from the Kwik Save estate:

North: 7

Alfreton, Barnsley (2), Buxton, Pudsey, Sheffield, Wetherby

North East: 11

Chester Le Street, Doncaster, Durham, Hull (2), Middlesbrough (3), Newcastle-upon-Tyne, Stockton-on-Tees, Whitley Bay

North West: 14

Barrow in Furness, Crewe, Haydock, Liverpool (3), Manchester, Penwortham, St Helens (2), Stockport, Warley, Widnes, Wilmslow

East Midlands: 8

Corby, Hinckley, Leicester, Newark, Nottingham (2), Ripley, Wellingborough

West Midlands: 9

Birmingham (3), Coventry, Dudley, Forest Hill, Newcastle-under-lyme, Stoke on Trent, Wednesbury

Shropshire: 2

Oswestry, Whitchurch

Wales: 5

Gorseinon, Nelson, Newport, Port Talbot, Welshpool