Booths, the so-called ‘Waitrose of the north’, will have to undergo an independent financial review of the company after a testing 18 months.
Corporate finance firm Grant Thornton has been called on to carry out the bank review of the business, which has 28 stores in the north of England, predominantly in Lancashire.
The supermarket chain was hit hard by Storm Desmond in December 2015, with floods causing damage to a number of stores in the north west.
Sales dropped by 0.7 per cent to £276.6m in the year to the end of March 2016, with Booths suffering a 1.4 per cent loss as a direct result of the flooding in the Lake District last year.
If Storm Desmond hadn’t happened, the business would have recorded a 0.7 per cent rise in sales.
Grant Thornton, which has been drafted in by Booth’s main lenders Royal Bank of Scotland and HSBC to conduct the review, will advise Booths on the best way to proceed financially. According to The Guardian, this could involve the Booth family providing extra funds to prop up the business.
Edwin Booth, the supermarket’s executive chairman and chief executive, told the newspaper: “These are turbulent times for the retail industry, which is rife with conjecture and speculation.
“We have an effective plan and team in place to ensure Booths remains a much loved retailer for our customers here in the north. Booths is a resilient 170-year, family-owned retailer with strong brand loyalty and leadership in place.
“We’re focusing on delivering the best service, products and value to our customers.”
The retailer has already taken action to address the financial losses it suffered after Storm Desmond, The Guardian reported.
In April 2015 it laid off 100 senior managers, incurring a one-off charge of £1.6m, and was forced to close several stores. This led to a £6.3m loss in 2016, following a £1.1m profit the year before.
Former CEO Chris Dee was also replaced by Booth, leaving the business after more than 20 years. But the company has invested in five new store openings in the past year and a half. This has created 400 new jobs.
