Historic Scottish fashion retailer collapses for a second time

The collapse of Scottish fashion retailer MCo has left more than 600 unsecured creditors facing losses of over £33 million. The company entered administration in December 2022, triggering the closure of all 168 stores and the loss of approximately 1,800 jobs. Newly lodged administrator documents have now revealed the full financial scale of the failure.

MCo’s roots stretched back to Paisley in 1834, when it began life as a pawnbroker. The business later entered fashion retail under the Mackays name in 1953, after being relaunched by family owners Len and Ian McGeoch. That long history made its eventual disappearance from the high street particularly significant.

MCo’s pandemic rescue failed to secure a lasting recovery

The retailer had already entered administration during the Covid-19 pandemic, when 47 shops were closed and around 380 jobs were lost. The McGeoch family subsequently bought the business and its assets back, giving the brand a chance to continue trading. However, the recovery proved temporary as the company returned to administration less than two years later.

The second collapse was handled by Teneo, with Adele Macleod, Gavin Park and Robert Harding appointed as joint administrators. The proceedings eventually moved from administration to dissolution in June, formally bringing the company’s affairs to a close. The case demonstrates how difficult it became for traditional retailers to recover after repeated financial shocks.

Rising costs and weaker spending pushed the retailer towards insolvency

According to the administrators, MCo’s difficulties reflected pressures affecting high street retailers across the UK. The recovery in consumer spending after the pandemic was described as drawn out, while high inflation increased the company’s operating costs. At the same time, the cost-of-living crisis changed how customers approached discretionary spending, including fashion purchases.

The company’s financial position deteriorated rapidly during the months before administration. By November 2022, MCo had accumulated approximately £12 million in overdue supplier payments. The directors appointed administrators in anticipation of a winding-up petition, as the business struggled to maintain supplies and meet its obligations.

The administrators also made payments to selected critical suppliers to prevent essential services from being withdrawn. These so-called ransom payments totalled £196,000 and were considered necessary to support the administration’s trading strategy. The payments underline how little room remained for the retailer to operate normally before its collapse.

Sale to Yours Clothing owner raised only £2.5 million

After MCo entered administration, its brand and online business were acquired by AK Retail Holdings, the company behind plus-size fashion retailer Yours Clothing. The purchase price was disclosed in the administrator’s report as £2.5 million. Although the transaction preserved the brand and digital operation, it did not prevent the loss of the wider store network and thousands of jobs.

The administrators adjudicated all submitted claims and admitted 608 claims for dividend purposes. These claims totalled approximately £34 million, below the £41 million included in the directors’ original statement of affairs. The difference reflects the process of reviewing, validating and rejecting creditor claims during formal insolvency proceedings.

Secured creditors received significantly better treatment than ordinary unsecured suppliers. HUK’s £3.3 million secured debt and HSBC’s £8.7 million secured debt were repaid in full, while HMRC received £2.6 million. However, the floating-charge holder was not repaid in full, showing that even creditors with security were unable to recover every pound owed.

Unsecured creditors receive minimal return as MCo disappears

The maximum prescribed-part fund of £800,000 was distributed to non-preferential unsecured creditors on 9 March 2026. The payment represented a dividend of just 2.32p for every pound owed. Beyond that distribution, the administrator stated that insufficient funds were available to make any further payment to ordinary unsecured creditors.

For suppliers, landlords and other businesses owed money by MCo, the outcome means that the overwhelming majority of their claims have been lost. The pension position was treated separately, with the outstanding pension scheme debt paid by Holdings in August 2024. The administrators confirmed that the pension scheme’s security had consequently been satisfied.

The end of the case offers a stark picture of the pressure facing established high street brands. MCo survived one administration, a family-led buyback and a subsequent sale, but could not withstand the combined effect of weak consumer demand, inflation and unpaid supplier balances. Its dissolution closes the chapter on a business whose history began nearly two centuries ago.