Distribution specialist MBL is up for sale after supermarket group Morrisons terminated two contracts that make up 78 per cent of the company’s sales.
KPMG Corporate Finance is to seek a suitable purchaser for MBL which specialises in DVD, CD and console and computer game formats.
The two supply agreements with Morrisons will be terminated from 14th September. In the year to 31 March 2010, Morrisons accounted for some 78 per cent of MBL sales.
In a statement MBL said: “The board of MBL had been in negotiations with Morrisons for several months regarding a future commercial relationship but have also been notified that they have been unsuccessful in securing the third party logistics service tender. As previously announced Morrisons had decided to move away from the existing full supply arrangements provided by MBL.
“The announcement will necessitate a significant downsizing of our operations and with regret the resultant loss of employment for many of our employees. We are commencing discussions with Morrisons and the new service provider regarding those employees who will be in scope for TUPE at the end of the agreements.”
MBL was founded as Air Music and Media Group in 1995 and changed its name to MBL Group in 2008. It has three main operating divisions, Music Box Leisure based in Leyland, ESD Wholesale based in Buckinghamshire, and Windsong based in London.
The group is also involved in negotiations regarding the stock balances which it has purchased in support of the existing agreements with Morrisons and which represent a high proportion of the total stock balances of the group.