Four to bid for Escom

Receivers for Escom UK Ltd, the computer store chain which suffered from the problems of its former German parent, could announce a buyer for the business by Tuesday.

Up to four businesses are expected to submit bids for the entire group, with a view to continuing it as a computer chain. At least one is a well- known retail brand, which would expect to broaden the business into a full-blown computer store selling a wide range of models.

Many observers have expressed unease with the Escom format which, they say, lacks economies of scale. "Large out-of-town sites are the way forward. Many of the Escom shops are too small," said one retail source.

Sale documents for the company, which has annual turnover of pounds 200m, were sent out last week. Some 60 businesses have expressed interest, but the bulk of these are for individual sites. Escom has 168 shops in the UK after closing 74 unprofitable sites.

Dixons, the largest computer retailer in the country, is understood not to be interested.

Geoff Saunders, Escom UK's former commercial director, who was made redundant on Tuesday, is still attempting to arrange finance for a management buy- out of the business. He was unavailable for comment.

"The shops remain open and we are hopeful of finding a buyer next week," said Nick Dargan, the receiver, of accountants Deloitte Touche.

Escom shops sold only Escom computers, making it the sole vertically integrated computer manufacturer and retailer in Europe. Problems included overstocking by the parent after it failed to forecast accurately the all-important Christmas period, projecting growth of as high as 50 per cent. In the event, annual sales grew at the still enviable rate of 20 per cent, but overstocking, coupled with distribution problems, led to its move into creditor protection last month.

Escom UK followed suit, going into receivership last week.