500 jobs in peril as buyers shun Whittard
Monday 22 December 2008
Whittard of Chelsea, the 122-year-old coffee and tea specialist, is understood to be on the brink of administration this afternoon – putting up to 500 jobs at risk, The Independent can exclusively reveal.
It is understood that the Baugur-backed 127-store retail chain could be placed into administration as early as this afternoon. It is lined up Ernst & Young as administrator, but it is not clear if the retailer will do a pre-pack application or a full-blown administration.
In a pre-pack, a company is typically put into administration and swiftly bought out of it by new owners with reduced liabilities, such as on unprofitable stores or retail stock.
Whittard was thought to still be talking to some potential purchasers this afternoon, raising the possibility that a new owner will buy it out of pre-pack administration.
Baugur, the stricken Icelandic investor, declined to comment. In October, Whittard of Chelsea appointed KPMG to review its cash management. But it was subsequently put up for sale by its Icelandic owners. KPMG and Ernst & Young could not be reached this afternoon.
The tea and coffee chain had received up to five bids from potential purchasers by 12 December, but it is understood that not one of them was willing to meet its initial asking price. Up to two trade buyers and the restructuring specialists, Hilco and Gordon Brothers, had been involved in the bidding process, but a sale did not materialise.
According to market sources, the owners are believed to have wanted £1 million for the chain, but this was considered too high by the suitors.
On 25 December, Whittard of Chelsea faces a multi-million pound rent payment for the first quarter of 2009.
Walter Whittard established his tea company in 1886, trading at 165 Fleet Street.
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