Covid-19: Shopping centre owner Intu enters administration, putting jobs at risk across its sites

Shopping centre owner Intu has confirmed it has gone into administration after revealing earlier today that talks with its creditors broke down. The move puts the future of its 17 shopping centres in the UK into doubt, including the jobs of Intu’s 2,500 staff and the 130,000 roles its wider chain supports.

Intu said that all its shopping centres are continuing to trade at the moment as the group’s underlying operating companies remain unaffected. It added that “the shopping centre operating companies have or are expected to enter into transitional services agreements with the administrators of the central entities to ensure continuity of service provision by the central entities to the individual shopping centres”.

Accountancy firm KPMG has been appointed as the administrator for Intu, whose shopping sites include Lakeside in Essex and the Trafford Centre in Manchester. Intu has had severe financial problems prior to the Covid-19 pandemic struck, with an estimated debt of £4.6 billion of debt, although the pandemic has significantly worsened this issue.

Commenting on Intu’s administration and its impact on retailers operating on its sites, Brian Burke, director at business advisory firm Quantuma said: “In addition to many retailers having to consider their need to restructure their businesses in light of the pandemic, many are having to evaluate their store base. With Intu being a prominent landlord, there will undoubtedly be negotiations with many of their leaseholders, who will be seeking waivers and concessions. it will be interesting to see how the administrators deal with these and whether any conflicts arise where they have advised retailers in their portfolio. 

“Ultimately, the focus will be on preserving value and jobs. They will seek to generate the best outcome for Intu’s creditors and to achieve this, the business needs to be functioning. In turn, this will offer sufficient flexibility to allow the Intu portfolio to create an effective work out that may result in the portfolio being carved up and sold.”

The news comes shortly after retail stores have started reopening from 15 June following 12 weeks of closure as a result of Covid-19 lockdown measures. Intu recently outlined a range of measures it had introduced across its centres to keep customers and employees safe during the ongoing pandemic.