SCOTTISH fashion retailer M&Co is closing 47 stores and cutting around 380 staff in a rescue deal that will save more than 2,200 jobs and 218 stores.

In a move designed to strengthen the firm’s city centre and online presence, the founding McGeoch family and current owners are buying back the business in a ‘pre-pack’ administration. This is an insolvency procedure which allows a firm to sell itself, or its assets, before it appoints an administrator, without affecting its day-to-day operations.

“It’s not a decision we took lightly, after more than 50 years of trading, but it gives us a sustainable basis from which to rebuild, with the majority of our staff keeping their jobs and 218 stores in high streets across the country remaining open,” said chief executive Andy McGeoch.

“The most difficult part of this process is undoubtedly seeing around 380 colleagues in stores and at our Glasgow and London operations leaving the business. It’s a terrible situation for them and I’m desperately sorry that we couldn’t come up with a viable plan which would have saved all the jobs.”

The Covid-19 lockdown and forced closure of all the company’s stores had been a “huge financial hit” said Mr McGeoch, who runs the business with his brother, Neil McGeoch.

“It quickly became clear that the best way to save most jobs and most stores was to enter administration, with a new company acquiring the assets of the old business, and this process has now been finalised.”

The firm, which was founded in 1961 and is based in Inchinnan, Renfrew, appointed advisers Deloitte in April to search for new investors following a sales slump.

Michael Magnay, joint administrator at Deloitte, said: “Like many high street retailers, M&Co has been seeking to address a number of underlying business challenges in the current UK retail environment, which have been exacerbated by the impact of Covid-19.

“The transaction sees the majority of the stores continuing to trade, protecting the employment of many of the company’s staff. However, it’s clearly disappointing that a number of stores have had to close resulting in today’s redundancies. We will provide all necessary support to those who have been impacted.”

Mr McGeoch said M&Co had reopened most of its stores in June and had been “exploring every possible option”, but it was obvious that the business, as previously structured, would remain under severe pressure from the ongoing challenges of Covid-19.

Aurelius, a London-based debt solutions firm, is understood to have agreed funding to help M&Co weather the Covid-19 crisis.

Mr McGeoch said: “As everyone knows, retail has been one of the sectors hardest-hit by Covid-19, with long-term shop closures and social distancing having a hugely negative impact.

“Like many of the UK’s best-known High Street names, we’ve been facing up to a number of underlying business challenges in the current retail environment, which have been exacerbated by the impact of Covid-19.”

Pre-pack deals can be controversial because debts are written off, but insolvency practitioners argue they often provide the best returns for creditors, by minimising disruption to trading and the brand, and reducing the cost of insolvency.

Other high street chains that have used pre-packs include Debenhams, Monsoon Accessorize and Cath Kidston.

Mackays Draper’s first opened in Paisley in 1961 and had 50 stores by 1969. The business was rebranded to M&Co in 2003 and launched online in 2006.

Mr McGeoch said the response from the chain’s customers during lockdown was “phenomenal.” “We had a steady stream of requests for updates,” he said.