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In the wake of this week’s sale of Ireland’s iconic food retailer Superquinn to Musgrave, which happened shortly after Superquinn went into receivership because of mounting debt, the company’s CEO, Andrew Street, resigned from his position because of concerns about how suppliers were being treated by KPMG and the banking coalition that were supervising Superquinn’s finances.

In an email to Superquinn staff, Street wrote, in part:

“The receivership process that has been imposed on the business by the bank syndicate is not being conducted in a way I find acceptable.

“This particular process has been selected by the banks concerned in order that they can secure the maximum amount of the sale proceeds for themselves.

“This is being done at considerable cost to our suppliers. The board of Superquinn has made it clear consistently to the banks that they do not support this approach.

“Over the last few days it has been distressing to see queues of suppliers in our reception waiting to see if they will be paid and, in many cases, being turned away empty handed by the receiver.

“Many of them are small businesses and most of them are long-time and loyal supporters of the company. As well as the financial pain inflicted on these suppliers this policy is causing havoc to our stock resupply with inevitable sales consequences.

“I had hoped that the banks would have the good grace and sense to use a relatively small portion of the substantial proceeds of the sale that they will receive to pay suppliers in full. They have refused to do this. A course of action which I am told by senior management in the Bank of Ireland (the lead bank in the syndicate) has been approved at the highest level in the bank executive.

“This approach is all the more surprising because most of the suppliers affected are also customers of one or other of the syndicate banks.”

Subsequent to the announcement of Street’s resignation, the Irish Times writes, “Superquinn directors trumped all this by going to the High Court in a bid to have an examiner appointed to the business. That action is on hold and the receivers are still in the driving seat, but if it succeeds, the banks will lose control of the process. Examinership would mean the company would get High Court protection from all creditors, secured lenders included, for up to 100 days. Such a move would not necessarily suit suppliers either, and those who are critical of the receivership are even more worried about the consequences of an examinership.

“The sums lost by individual businesses range from at least the high six figures down to tens of thousands. One large-scale creditor, whose business has lost several hundred thousand euro, said yesterday he was aware of a number of others which have stopped supplying Superquinn.”
KC's View:
What a mess.

It is a shame that things have gotten this bad, and I hope for everyone’s sake that this is able to be worked out so that people who work for Superquinn keep their jobs and suppliers are made as whole as possible.

There was, by the way, a lovely column in the Herald by Michael O’Doherty in which he wrote, in part:

“I FIRST met Feargal Quinn in the mid-1980s, as I was good friends with his eldest daughter and a regular visitor to his house.

“Back then, Feargal was something of a business legend in Ireland. Having founded Superquinn in Dundalk in 1960, he built it up as a quality operation, more niche than its bigger rivals -- Dunnes and Quinnsworth -- but consciously more geared towards making shopping pleasant, rather than just cheap.

“He introduced fresh bread, vegetables, and in-store butchers to the supermarket environment before anyone else. He insisted that his stores be a pleasant place to shop, and made Superquinn a byword for customer service.

“Long before it became a fashionable part of management guidebooks, he would get up early, six days a week, and pound the aisles of his shops, meeting and greeting customers, listening to their comments, and acting on them.

“Despite this intense workload, Feargal still managed to be home at six most evenings, and would make a point of sitting down with his wife, and a bottle of wine, to unwind before dinner with the family. But then in 2005, perhaps with a feeling that the good times were coming to an end -- how astute he was in that regard -- and that he had taken Superquinn as far as he could, Feargal sold the business for something around €450m.

“Almost from that very day, the company started to go downhill.

“Bought out by a group of businessmen and property developers, many regular shoppers noticed how the famed 'Superquinn experience' started to wane, with your average Tesco or Dunnes now boasting far more attractive and modern stores, something unthinkable 20 years ago.”

O’Doherty goes on:

“Hopefully Superquinn will have a brighter future, and regain some of the respect it bathed in during Feargal's reign.

“People always say that nobody is indispensable, and that no one man is bigger than a company. Much of the time those people are right, but to those who think that rule cannot be disproven, I have two words. Feargal Quinn.”

I would have to agree with these sentiments. Some people bring financial expertise to a business, some bring marketing moxie, and some bring merchandising savvy or some other quality. But what Feargal Quinn brought was no less than magic.