London—British shopping center giant Intu, whose properties have been ravaged by the coronavirus lockdown, warned on Friday that it was likely to collapse after talks failed to restructure its finances.
Intu, which owns giant shopping malls including MetroCentre and the Trafford Centre in northern England and Lakeside in the southeast, had been seeking to progress talks with creditors ahead of a midnight deadline.
Shopping centers were forced to close for three months after the government imposed a nationwide lockdown on March 23 in a bid to halt the COVID-19 outbreak. Restrictions began to be eased this month.
In a statement on Friday, Intu announced that “insufficient alignment and agreement has been achieved” with its creditors.
“The board is therefore considering the position of Intu with a view to protecting the interests of its stakeholders,” it added.
“This is likely to involve the appointment of administrators. A further announcement will be made as soon as possible.”
Administration is the process whereby a troubled company calls upon independent financial help in a bid to restructure the business, remain operational and to try to minimize job losses.
Intu had warned on Tuesday that some of its shopping centers “have reduced rent collections as a result of COVID-19.”
KPMG has been put on stand-by in case the group enters administration, while there was also “a risk that centers may have to close for a period,” Intu stated earlier in the week.
British supermarket giant Tesco, meanwhile, announced Friday that its first-quarter sales jumped eight percent, boosted by rocketing online purchases as people switched to grocery deliveries during the nationwide coronavirus lockdown.
Total sales surged to £13.4 billion ($16.6 billion, 14.8 billion euros) in the company’s first quarter—the 13 weeks to end-May—compared with a year earlier, the nation’s biggest retailer said in a trading update.
The bumper performance came after the government imposed a lockdown on March 23 in a bid to halt the COVID-19 outbreak. Restrictions began to be eased this month.
Online sales soared by a staggering 48.5 percent in the reporting period as the company ramped up its delivery capability to cope with booming demand from customers staying at home.
The online business saw sales sky-rocket by more than 90 percent in May alone, the company added.
“Through a very challenging period for everyone, Tesco colleagues have gone above and beyond, and I’m extremely proud of what they’ve achieved,” Chief Executive Dave Lewis said in the earnings release.
He added: “We doubled our online capacity to help support our most vulnerable customers and transformed our stores with extensive social distancing measures so that everyone who was able to shop in store could do so safely.
“The costs of doing this have been significant and only partly offset by business rates relief and increased volume. We see the balance as an investment in supporting our customers at a time when they need it most.”