Court appoints examiner to B&Q

The High Court has confirmed an examiner to B&Q Ireland Ltd, whose situation the judge said had aspects that were both “depressingly familiar” and “refreshingly new”.

B&Q operates nine home improvement stores in Ireland, employing 690 people, of whom 500 are part-time workers.

As part of cost-cutting proposals, B&Q’s two stores in Athlone and Waterford are to close with the “regrettable” loss of 92 jobs, 69 part time and 23 full time, Mr Justice Peter Kelly noted.

A key ingredient for the survival of some of the company’s other stores includes renegotiation of what the judge described as “extraordinary” rents. The total rent roll for the nine stores is €11.6m a year, €5.8m above market rates, the court heard.

Declan McDonald, who was appointed interim examiner to the company late last month, had been encouraged by expressions of interest from four potential investors in addition to the company’s parent, Kingfisher plc, the judge was told.

Rossa Fanning, counsel for B&Q, presented letters to the court in which Kingfisher, owed some €17m by the company, indicated it was prepared to support the company through the examinership process and to invest in it on certain conditions, including implementation of a cost-cutting programme and the successful negotiation of a survival scheme.

Mr Justice Kelly said yesterday he was satisfied to appoint Mr McDonald as examiner. There was no opposition to the proposed appointment while the Revenue Commissioners took a neutral position. There are no arrears owed to the Revenue and the company has undertaken to meet payments due shortly to the Revenue, totalling about €1.25m.

The judge said the situation of the company had aspects which were both “depressingly familiar” and “refreshingly new”.

It was depressing familiar in that it was “bedeviled” with a fall of 34% in revenue since 2009 and it was also obliged to pay “extraordinary” rents. Its turnover had fallen 24.2% from a peak of €124m in 2009 to €94.2m in the financial year to the end of Jan 2012.

The refreshingly new aspect was that the company had no bank debt and had no arrears to the Revenue, Mr Justice Kelly said.

He was satisfied from the material before the court that the company, provided certain conditions were met, had a reasonable prospect of continuing to trade and to be run in a profitable way into the future.

The examiner would have a lot of work to do, including renegotiation of rents, but the court hoped this examinership would conclude quickly, the judge added.

The court previously was told all vouchers, credit notes and deposits will be honoured by the company throughout the examinership period.