Haldanes and Co-op in store feud

THE Co-operative Group is facing legal action from independent retail chain Haldanes over the sale of 26 stores in 2009-10.

The Lincolnshire group claims The Co-op – which prides itself on doing business ethically – is trying to put it out of business, and won’t even meet to discuss its concerns.

Arthur Harris, chief executive of Haldanes alleged he had been made the Co-op’s ‘whipping boy’  and has had to pump £2m into the business as a result of trading problems in the former Co-op stores, which the Manchester-based mutual was forced to divest to satisfy competition concerns following its acquisition of Somerfield.

He said: “The Co-op has a real interest in driving Haldanes out of business Over the last four months I, through another of my companies, have had to invest £2m into Haldanes to ensure the business could continue and staff be paid. 600 jobs are at stake here, all ex-Co-op employees, and the Co-op appears to have no regard for these people whatsoever.

“It is my firm and honest belief that the ‘caring, sharing’ public image and ethical stance portrayed by the Co-op is an utter fallacy.

“The Co-op has made me their ‘whipping boy’ for stores which they were struggling to find a buyer for, but which they needed to sell, to avoid competition issues.

“The Co-op has sold me, customers in 26 local markets, and quite possibly 600 of their former employees down the river in order to do its deal with Somerfields while cynically weakening the competition their own stores face in these localities.”

The Co-operative Group’s denied that any legal action was under way from Haldanes, but said it was suing Haldanes for non-payment of rent.

In a statement it pledged to “vigorously contest” any litigation that may arise.

“The Co-operative Group started legal proceedings against Haldanes Stores Ltd in April 2011 to recover possession of a number of the 26 stores they bought from us after our acquisition of Somerfield.

“Our decision to take legal action followed Haldanes’ failure to pay rents owing to the Group and was made reluctantly after other avenues had been exhausted.

“Haldanes has indicated in a press release that it has issued proceedings against the Co-operative Group, however, no proceedings have been served on the group at the time of releasing this statement. Should they be served, we intend to contest them vigorously.

“The Co-operative Group has acted in good faith throughout its dealings with Haldanes and categorically refutes all allegations of impropriety.

“The original transaction was subject to full due diligence on the part of Haldanes and its advisers.

“The Co-operative Group has complied with all our competition undertakings and, at the same time, has been pleased to support the Haldanes business financially through its start-up phase.

“We have no further comment to make at this stage.”