Potential Stonegate collapse ‘raises questions’ about Asda’s future, says trade association

GMB has said that the potential collapse of TDR Capital-owned Stonegate Group “raises huge questions” over the future of Asda.

The comments follow a profit warning issued by the pub chain after it revealed it was struggling to refinance its debts.

Stonegate is now the largest pub and bar company in the UK, with 4,400 locations across the UK, including the Slug and Lettuce and Be At One chains.

GMB said that the private equity-firm, which co-owns Asda, previously told a parliamentary committee it was "very confident" that it could refinance its debt.

However, Stonegate's accounts ultimately demonstrated "material uncertainty" over its refinancing plans.

In a letter to Laim Byrne MP, chair of the Business and Trade Committee, GMB says TDR was not up front in answers to parliament and asks him to recall TDR back in front of the committee.

The organisation said that the collapse would put thousands of jobs at risk and raise "serious concerns" for Asda's future.

TDR Capital is no stranger to criticism from the trade association.

At the end of last year, when the parliamentary Business and Trade Committee announced it would hold an evidence session with Asda co-owned Mohsin Issa to examine the use of private equity, it said that TDR should "not be allowed to duck scrutiny".

In January, the company did face questions from MPs about its joint buyout of Asda following the initial evidence session.

At the time, GMB said that "shadowy private equity bosses" too often dodge scrutiny.

Commenting on the Stonegate debt issues, GMB national officer Nadine Houghton said that TDR bosses have "serious questions to answer", including whythe founding partner of TDR Capital resigned from the pub company's board on 1 December.

“Under TDR Capital, Stonegate has been driven into the ground," said Houghton.
“Now they’re doing the same at Asda: slashing millions of staff hours from the shop floor, allowing standards to decline in store and losing market share."

She accused TDR Capital of using a business model that "heaps debt on companies", suggesting that the collapse of Stonegate may be a "dire warning of what's to come for Asda".

Retail Systems has approached both TDR Capital and Asda for comment.



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