The 131 shops that were owned by Athena will be closed from today and most of the group's 600 employees will lose their jobs. The 30 franchise outlets will remain open and the receivers say they still hope to be able to sell these.
Grant Thornton says that the sale of the business was made difficult because of distraint actions by a number of landlords who had taken stock from shops in lieu of unpaid rents. This led to the closure of 37 outlets before yesterday's decision.
Scott Barnes of Grant Thornton said: "Since the appointment of receivers last Wednesday, the team here have analysed the plethora of problems surrounding the company. The closure of the majority of the stores was perhaps inevitable given those problems, the action taken by distraining landlords and the lack of acceptable offers."
The closure is bound to add fuel to the debate over the actions of Pentos in December, when it forced the subsidiary into receivership. The decision raised ethical problems over whether a parent company should be allowed to ringfence subsidiaries. Unsecured creditors are unlikely to get any of their money back from a company that has debts of around £7m.
Pentos was defending its decision yesterday. A spokesman said: "The group would not have survived if this decision had not been taken. We did what we felt we had to do in order to safeguard the jobs and shareholders in the group as a whole."
There remains doubt over the possible reaction from suppliers to other parts of the Pentos empire, such as Rymans and Dillons, the booksellers. It is felt some might be nervous about extending credit to a company that does not stand behind its subsidiaries.
Pentos said yesterday that relations with other suppliers remained robust and that many recognised that Athena had terminal problems. In the last six months Athena made losses of £5m on sales of £16m. A key problem was its high cost base, particularly its rental agreements, which cost £8m a year.
One analyst said yesterday that the demise of Athena - a feature of the high street since the 1970s - was inevitable. "It made its money from a high-spending teenage audience. Nowadays that market is very difficult and and changing demographics means itsaudience is shrinking," he said.
City analysts are awaiting news on how the rest of Pentos is performing and a trading statement is expected today. Terry Maher, the ousted Pentos chairman, brought Athena into the group.Reuse content