Sports firm's 'pre-packaged' receivership to save 650 jobs
Published 01/02/2014 | 02:30
Sports chain Elverys was on the brink of being placed into receivership last night, as part of a rescue plan that will see the business sold immediately to a management group.
It comes as unions at the rival Lifestyle Sports chain expressed concern that 10 of its 67 stores in Ireland could be shut as the group seeks rent reductions.
The planned receivership and sale of Elverys will see all 650 jobs at the chain saved. Staff at 55 Elverys stores across the country were due to be informed of the plans overnight.
While no job losses are expected, it is not yet clear whether all outlets will be retained by the new owners, though the plan is to maintain a national presence.
Customers and suppliers will not be affected by the sale while gift vouchers will be honoured and suppliers paid in full.
Under a "pre-packaged" arrangement he will sell the business to an investment group headed by current chief executive Patrick Rowland.
No former directors of the business are involved in the new ownership team, which is believed to have secured new investment through corporate finance house CapNua.
The retail business is being sold as part of a wider restructuring of debts owed to NAMA by Elverys owners, Mayo brothers John and James Staunton. Their originally Connacht-based Staunton's chain bought the older Elverys brand in 1998, and merged them under the Elverys name.
Proceeds of the sale by the receiver will be used to reduce debts owed to NAMA, while remaining loans will continue to be owned by the previous owners.
That will allow the chain itself to emerge from the receivership effectively debt free.
Corporate finance house IBI ran an auction process to find a buyer for the Elverys business last year, meaning it was widely marketed before today's sale.
Meanwhile, trade union Mandate, which represents workers at Lifestyle Sports, has expressed concern at what the union called "threats by management" to close 10 of their 67 stores in Ireland.
The announcement that closures could be on the cards was "irresponsible and insensitive" to staff, the union said in a statement. No jobs will be lost at Lifestyle Sports even if the closures go ahead, but some staff may be transferred.