Video report by ITV News Consumer Editor Chris Choi
Trafford Centre owner Intu has collapsed into administration, after failing to secure its future during crunch talks with lenders.
The shopping centre owner, which also runs Lakeside in Essex, had been in a desperate scramble to agree a “standstill” on its current loan agreements.
On Friday morning the group said it was likely to appoint administrators, as it remained unable to agree the terms of such a deal with its creditors.
ITV News Correspondent Neil Connery explains the situation just moments before the company announced it had gone into administration:
In a statement the group, which has until midnight on Friday to reach a deal, said “insufficient alignment and agreement has been achieved”.
It added: “The board is therefore considering the position of Intu with a view to protecting the interests of its stakeholders.
“This is likely to involve the appointment of administrators. A further announcement will be made as soon as possible.”
In an interview shortly before the announcement, Boris Johnson pledges to 'do everything we can to look after' shopping malls:
Earlier this week, Intu said it put administrators from KPMG on stand-by as it looked to secure a deal ahead of the midnight deadline on its current loan covenants.
The group has struggled under a £4.5 billion debt burden for the past year, but has been hammered by significantly lower rent payments from retail tenants since the coronavirus outbreak.
Intu employs about 3,000 staff across the UK, while a further 102,000 work for the shops within its shopping centres.
It warned on Tuesday that its malls may be forced to shut if it was unable to secure the standstill agreement.
What went wrong for Intu?
Chris Choi, Consumer Editor, ITV News
Intu owns the towering giants of UK retail, but in current market conditions that’s not necessarily a good thing. The problem is, centres like these have too many empty units as retailers shift more and more online. Many of the outlets that remain are either struggling to pay rents - or seeking to renegotiate them. Months of retail lockdown made that bad situation even worse.
The firm has 17 shopping centres including Braehead in Glasgow, Metrocentre in Gateshead and Merry Hill in the West Midlands. It is reported to have debts of around £4.5 billion. With around 3000 direct employees and over 100,000 workers in the outlets it houses.
Today, the future of the centres and their staff is unclear. The role of physical stores - and the malls that accommodate them - is increasingly uncertain.