Axe falls on 670 jobs at stricken store group Allders

MORE THAN 10 per cent of employees across Allders are to lose their jobs in advance of the department store group's eventual break- up, the administrators admitted yesterday.

A total of 670 jobs are to be axed, including 209 at the company's Croydon-based headquarters. In an attempt to soften the blow and boost morale among the 5,000 staff remaining, the administrators said they would recommence monthly contributions to the company's pension scheme.

Kroll, which is imminently expected to finalise the sale of 35 of the group's 46 stores, pledged to inject about pounds 350,000 into the scheme, or pounds 58,150 a month, until at least June.

The 2,500 members of the pension fund must wait until the sales are complete to learn whether they will retain any of their savings. The pension deficit is estimated to be up to pounds 60m. A spokesman for Kroll said the decision to resume regular monthly pension fund contributions was aimed at "maintaining morale and stopping value evaporating" from the business.

The job cuts have been made across the group's 46 stores, including the 11 that have attracted no bid interest.

Kroll said it had made the cuts to "remove overstaffing at the stores". Allders' Croydon store will bear the brunt of the job losses: 76 of the store's 587 employees are to be made redundant. "It was necessary to reduce the level of employment to meet the needs of each individual store," the administrators said. "The operational requirements at Allders headquarters had to be reconsidered by the administrators in the absence of any viable bid for the whole group," they added.

Andrew Pepper, of Kroll, had hoped to sell the whole group as a going concern. But he admitted defeat this week and is now expected to let groups of bidders carve up 35 stores. Among those interested are Debenhams, Associated British Food's Primark and Bhs, owned by Philip Green.

Kroll said customers had flocked to the 11 stores that launched closing down sales. Trading is about three times stronger than normal, which the administrators hope will help persuade a bidder to come forward. Mr Pepper said sales talks with the bidder were at an "advanced stage". He added: "We hope we can finalise the deals in short order and that they will lead to many of the employees in those stores being transferred to the new owners."