Convenience Store Closure and Rescue Options
Running a successful convenience store comes with a unique set of challenges. Competition from supermarkets and a potentially limited customer reach, in addition to the high cost of a full inventory and well-maintained store, means it’s not always easy to maintain a strong financial position. If you’re concerned about your convenience store’s finances and need advice on your options, we can help.
This guide is designed to help you navigate the complexities of insolvency, offering practical, tailored advice to convenience stores. With the right knowledge, you can make an informed decision about your company’s future, whether it involves restructuring, refinancing, or winding down operations.
Common financial challenges for convenience stores
We can help advise on financial issues your convenience store may face, including but not limited to:
- Competition with supermarkets
Supermarkets can draw customers away from smaller convenience stores. They have more physical space to offer a wider range of products, are generally better known by the masses, and can eat further into the market share with smaller, localised outlets. If this has caused financial difficulty for your company, by acting faster, we can help advise you on the best means of rescuing your business. - Limited customer reach
Convenience stores typically cater to a contained, local market and passing trade with limited opportunities to expand and increase their reach if they’re located outside places like town centres. If your company is struggling with declining revenue, speak to us for tailored, impartial advice on how to proceed. - Standing out and offering something unique
With the ease of acquiring food and other essentials, offering something unique can help differentiate your convenience store. Doing so could be a risk, as although it can lead to a profitable niche, your business could lose money if the venture isn’t profitable. We can advise on the recovery options available if your company is struggling to cover its expenses. - Rising operating costs
Increased running costs such as purchasing inventory, payroll, utilities, and ground rent, adhering to regulations around cleanliness and storing products can increase your business’ outgoings. Speak to us if your outgoings have increased to a point where you can’t afford them. We can advise you of your options. - Bounce Back Loans (BBL)
The government’s Bounce Back Loan initiative was very important during the pandemic. However, companies are now having trouble repaying them. We can give you advice on what options you have when it comes to repaying the loan and how a BBL would be treated in various insolvency options.
How we can help rescue your convenience store
Below are two formal insolvency procedures that would allow your convenience store to continue trading while protected from creditor action:
- Repay your company debts in a payment plan via a Company Voluntary Arrangement (CVA)
A CVA is a structured repayment plan that allows a company to manage its unsecured debts through affordable monthly repayments. Lasting up to five years, any of the company’s unsecured debts which remain upon the CVA’s completion are written off. By placing your company into a CVA, you’re ensuring protection against creditors who have agreed to the plan, and the opportunity to continue trading while slowly reducing the debt level, maintaining the company’s brand presence and preserving its reputation.
More on a Company Voluntary Arrangement - Restructure your company through administration
Placing your convenience store into administration provides it with a temporary state of protection, a moratorium, enabling the business to continue trading. As licensed insolvency practitioners, we will act as administrator and aim to rescue your company as a going concern. This may involve restructuring the business, streamlining operations, making staffing changes or finding new investment. We will also consider potential exit strategies from the procedure, which could involve a potential sale of the business, assets, the whole company, or transitioning to an alternative insolvency procedure.
More on administration
How we can help close and liquidate your convenience store
The liquidation of your convenience store would draw a line under its operations, dissolving the company and clearing its unsecured debts.
- Close your company down via a Creditors Voluntary Liquidation (CVL)
A CVL is a formal insolvency procedure designed for insolvent companies. The process would see your convenience store cease trading operations and close in an orderly and legally compliant manner. Your company’s assets will be realised, and the threat of legal action will be removed. Once completed, the company’s unsecured debts and arrears will be written off. If eligible, employees and directors can apply for statutory entitlements such as redundancy and holiday pay. If the company cannot afford to pay staff entitlements, claims can be made through the Redundancy Payment Services.
More on a Creditors Voluntary Liquidation - Close your company down and start again via a pre-pack liquidation
A pre-pack liquidation is an informal term for a type of liquidation where one company agrees to the pre-purchase of the assets of an existing company, which is then liquidated. This procedure would enable your company to continue trading in a new limited company, without any historical unsecured debt, causing minimal disruption to the business’s brand, customer base and operational activity. The new limited company can also retain key assets such as leases, equipment, as well as the potential transfer of employees under TUPE regulations. In some cases, you may reuse your company’s trading name, but this can be complex. We can advise you on these processes and how it works.
More on pre-pack liquidation
Commercial finance for convenience stores
If your company has steady cash flow but is at risk of being impacted by a significant upcoming payment, commercial finance could provide the support you need. There are several financing options that can help you manage one-time expenses or cover shortfalls in revenue. Contact us to explore the best commercial finance solutions tailored to your company’s situation.
More on commercial financeHow to get in touch with us: The next steps
If your convenience store is facing financial difficulty, it’s important to understand the different closure and recovery options. Our initial advisers will offer a comprehensive explanation of the different options available to you and our experienced consultants will look at tailoring our processes to your company’s circumstances.
Contact our initial advisers, who can advise you on your company’s solvent position and outline the options best suited to its circumstances.
- Speak with our initial advisers
Contact our team via phone or online chat. If we can help, we will arrange a free consultation with one of our consultants to discuss your situation in more depth. - Initial assessment
During the consultation, we will advise if an insolvency procedure is the most appropriate route forward or what alternative options are available. - Formally engage with Wilson Field
After your consultation, if there is an appropriate route forward, we will issue the relevant documentation for you to formally engage us.
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