The recent announcement that McColl's Retail Group has entered administration is having a knock-on effect on a Swindon business outside of those operating convenience stores and newsagents. 

Alliance News has reported that Smiths News PLC, a Swindon based newspaper and magazine wholesaler, has seen its shares tumbling due to bad debt risk as a result of the unexpected McColl's blow. 

McColl's revealed on Friday, May 6 that it had entered administration, and Smiths News PLC serves 600 McColl's stores, posing a potential bad debt risk of £6-7million, with £1.2million currently overdue. 

"The company is closely monitoring the current situation and considering options for reducing the current risk, including the return of unsold stock," the firm said.

After the announcement the stock price had fallen 14% by Friday afternoon, landing at 30.8 pence.

There are four McColl's in Swindon, two at Martin McColl's newstands in West Swindon District Centre and Braydon Court, Penhill. In Wroughton and Highworth there are two McColl's convenience stores. 

There are also two Morrison's Daily stores in Swindon, which are rebranded McColl's stores, one in Old Town and one on Marlowe Avenue.

Read: New Morrisons Daily opens in Old Town

These stores are some of the 1,100 across the UK now at risk of closure because of the administration, with 16,000 jobs at risk. 

The firm has struggled financially in recent years after witnessing soaring costs due to supply chain disruption, inflation and its large debt burden.

Today, Morrisons won a battle to take over the collapsed convenience store chain in a move that will secure the future of 16,000 jobs and 1,100 shops. 

The supermarket giant fended off competition from the billionaire Issa brothers, who also own Asda, with an offer that is expected to see McColl's stores and workforce preserved in their entirety.

McColl's lenders had rejected an initial offer from Morrisons on Friday that would have seen it take on the firm's debts and repay them over time. 

The bid would have protected the 'vast majority' of staff and stores as well as its £141 million pension plan. 

But Morrisons returned yesterday with an improved deal that would see the lenders repaid in full immediately, satisfying one of their key demands, although the details are unclear. 

Sky News reports that the deal is set to be structured as a pre-pack administration, meaning Morrisons will buy McColl's immediately after it enters insolvency proceedings overseen by PwC.