ALLDERS

The Allders department store chain has gone into administration, with Kroll appointed as administrators. Property group Minerva put the chain up for sale but failed to secure a buyer. The company will trade as normal and stores will stay open, while the administrators "review all options" for the business, including a sale. Third parties have previously expressed interest in the business and the administrators say they are hopeful that they can find a buyer.

"Allders is a long-established business with a good geographic spread of stores across the whole of England in both prime High Street retail and out-of-town retail locations," said Andrew Pepper, one of the three Kroll Corporate administrators. "Several parties have already expressed interest in the business and we will be contacting them immediately. This level of interest so early makes us hopeful that a going-concern sale can be achieved."

Rival retailers, such as Debenhams and House of Fraser, are thought to have previously expressed an interest in buying individual stores. Minerva said in a statement it was "disappointed" by the move into administration as it had worked hard to secure the future of Allders as a going concern. Placing the company in administration may put the long-term future of the company's 5,700 employees at risk. In the short term, all employees have been paid to the end of January and all wages going forward are to be paid as part of the administration.

The administrators also plan to investigate the position of the company's pension scheme "as a matter of urgency". Company accounts reveal the pensions fund has a deficit of about £15m. "We appreciate this is a worrying time for employees and their families and will regularly keep them informed of developments, " said Mr Pepper. The administrators will seek to deal "as fairly as possible" with customers who have paid deposits for goods.

If the product is available, customers will get it once they have paid the outstanding amount. If the goods are not in stock, the administrators want customers to use their deposit to buy something else in the store. Customers are advised to contact the store where they paid their deposit or, if they paid online, they are advised to go to their nearest store. "We want to reassure customers who have paid their deposits that we want to retain their custom and will make every effort to honour commitments made," said Mr Pepper.

Allders was bought for £162m in 2003 by the Scarlett Retail group, a consortium which included Minerva and financial group Lehman Brothers. Minerva has a 60% stake in Scarlett Retail. Former Bhs chief Terry Green was brought in as chief executive to lead a reorganisation of the retailer. The revamp included fresh stock and new store layouts, and a new buying team was brought in. "Allders was trying to become a much more fashionable, youth-orientated, store, but it inherited a middle-class, middle-aged, audience," said Maureen Hinton, senior retail analyst at Verdict Research.

Nearly 700 staff at Allders have been made redundant. Kroll, which took control of the company, announced 461 cuts at the stores and a further 209 at Allders' headquarters in Croydon, south London. The redundancies are in addition to 130 cuts already made at the head office. The administrators said the cuts, which are spread across most of its 45 stores, were necessary to remove overstaffing. A spokesman for Kroll said, "It was necessary to reduce the level of employment to meet the needs of each individual store." The hardest hit outlet was Croydon, where 76 jobs were cut.

Talks over the possible sale of 34 stores were at an advanced stage and all 45 remained open, Kroll said. The 143-year-old business went into administration after falling victim to tough trading conditions and the failure of its owners to find a buyer. Kroll revealed that it would have to break up the business after 11 stores generated just "limited" interest. The administrators had hoped to sell Allders as a going concern as this would have helped safeguard jobs. Kroll said the 209 head office redundancies, which include cuts at the logistics operation, were necessary after it became clear there was no bid for the entire group.

It also said it had agreed to make ongoing contributions of £58,000 a month to the company's pension scheme until at least June of this year. The group added, "The stores continue to trade well and, in particular, trading at the 11 stores where the administrators are not currently in talks with bidders is particularly strong." A closing down sale had generated momentum with trading nearly three times higher than usual as shoppers took advantage of bargains. Kroll said sale talks were progressing well and that it hoped to finalise deals that would see remaining staff transferred to the new owners. Allders continues to employ 5,000 staff and another 4,300 through in-store concessions. (Source: Mail on Sunday)