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Allders department store falls into administration Allders department store falls into administration
(about 1 hour later)
One of the country's biggest department stores, Allders of Croydon, has gone into administration in a move that puts 300 jobs at risk. Harold Tillman's retail empire has been left in tatters after the last piece finally collapsed.
The 150-year old store's failure is the latest setback for part-owner Harold Tillman, who called in administrators to his Aquascutum business in April and also sold nearly all of his stake in Jaeger. Allders of Croydon, one of the biggest department stores in the country, has called in administrators after last-minute negotiations with landlords and the local council fell apart.
Allders has appointed Duff & Phelps to explore "all options" to save the business, blaming the collapse on "the well-publicised economic difficulties facing the UK". Up to 850 jobs are now at risk as administrators from Duff & Phelps explore "all potential options" to save the 150-year-old store. Around 300 staff are directly employed, with a further 550 working in the store's concessions.
Allders had spent last week in negotiations with its landlord Minerva to reduce its rents, but the talks were unable to reach a solution. It is understood Minerva had already lowered the rent and Croydon council had deferred business rates, but to no avail. It comes as administrators for another struggling high street retailer, Clinton Cards, shut a further 122 stores on Friday with the loss of 880 staff. It means 1,600 jobs have been lost since its collapse last month, with nearly 2,000 remaining in the balance.
Andrew Mackenzie, an Allders director, said: "Whilst our funders, shareholders and concession partners have been supportive throughout and the ongoing restructure was progressing, the tough market conditions in the UK retail sector have forced the board to appoint administrators in order to protect the business and its creditors. We will now work with the administrator to continue ongoing discussions with funders and other interested parties in the business. With the considerable support already given by Croydon council and our landlord Minerva, I would hope that additional investment or a sale can be achieved." On Friday Allders blamed its failure on "the well-publicised economic difficulties facing the UK" following comments earlier this week from Tillman, who accused the government of failing to help the area following last summer's riots, which badly hit Croydon.
He said: "Unfortunately, nothing has been done by government or the council to help. It appears many businesses have not got compensation at all. Croydon council has not done what they should have done."
The company spent last week in negotiations with its landlord, Minerva, to reduce or suspend its rent. Local council officials have offered to defer all business rate payments until next January.
But the concessions could not save the famous store and last night Allders chief executive Andrew Mackenzie said: "Whilst our funders, shareholders and concession partners have been supportive throughout and the ongoing restructure was progressing, the tough market conditions in the UK retail sector have forced the board to appoint administrators in order to protect the business and its creditors.
Administrators said they are "exploring all potential options to maximise the realisation for the company's creditors including a sale of the business".Administrators said they are "exploring all potential options to maximise the realisation for the company's creditors including a sale of the business".
A spokeswoman for landlord Minerva said they have actively engaged with the company. She added: "We responded quickly and constructively to the concession requested. We are very disappointed that, even with our offer to assist, the Board of Allders has been unable to conclude that the business is viable going forward."
It is understood that Allders had already been given a rent reduction last December after raising concerns over its future.
Tillman, one of the UK's best known retailers, rescued the business from administration in 2005, but reduced his ownership in the store to 35% last year, selling the remaining stake equally to retail restructuring firm Hilco and West Register, a Royal Bank of Scotland-owned investment company.Tillman, one of the UK's best known retailers, rescued the business from administration in 2005, but reduced his ownership in the store to 35% last year, selling the remaining stake equally to retail restructuring firm Hilco and West Register, a Royal Bank of Scotland-owned investment company.
A spokesman for Croydon council said: "Allders informed the council that it had already been to the high court in Bristol to secure a notice of intention to appoint an administrator. The immediate support that the council could give was a deferral of business rates and we made an immediate offer to do so until January next year." Clinton Cards' administrator Zolfo Cooper revealed that 122 stores will be shut by 21 June, with the loss of 880 jobs.
Tillman could not be reached for comment. It comes a week after 4,500 full and part-time jobs were saved after Lakeshore Lending – a subsidiary of its largest creditor and supplier, American Greetings – took control of 397 stores.
But nearly 2,000 jobs remain in the balance as administrators continue to search for a buyer for the remaining 165 stores at risk.
Formerly listed Clinton Cards called in administrators last month after American Greetings unexpectedly called in its £35m loan. It led to 44 stores being shut at the end of May and a further 43 shut a fortnight ago before Friday's announcement.
So far, around 1,600 staff have been made redundant across Clinton Cards and Birthdays stores.
This week, new chief executive Dominique Schurman, said the rescued stores will undergo a makeover, stripping them of its distinctive orange branding.
Elsewhere, pawnbroker Albemarle & Bond issued a profit warning, sending shares down 14.5p, or 5.3%, to 261.5p. Its full year profit igures will be below expectations due to a sharp slowdown in the number of people trading in unwanted gold for cash.
The company said: "It is too early to tell if this is a reflection of the reduction in footfall from the very wet weather in the period or a developing trend."