Administration looms for retailer Allders

Allders, the loss-making department store group, was teetering on the brink of administration last night after a deadline for takeover bids passed.

Allders, the loss-making department store group, was teetering on the brink of administration last night after a deadline for takeover bids passed.

Terry Green, the chief executive and 10 per cent shareholder, said: "We are in discussions and waiting for responses."

Minerva, the property company that controls the department store group, put Allders up for sale last month but has failed to attract much in the way of serious interest. It controls the group via Scarlett Retail, a joint venture with Mr Green, his business partner Phil Cox, and Lehman Brothers.

Alchemy Partners, the private equity group, dropped out of the bidding at the weekend. Jon Moulton, who runs Alchemy, said yesterday: "We made no proposal. We're only interested in making one if the company goes into administration."

Debenhams, Primark and House of Fraser are all interested in buying a small number of stores.

Hilco, a turnaround specialist, bought all of Allders' debt last week at a heavy discount, sparking speculation that it would push for the group to call in the receivers. In 2003, Hilco acquired Ciro Citterio, only to put it into administration the following week.

If administrators are appointed, pension savings of 7,000 past and present Allders' employees - including its former chief executive Harvey Lipsith - could be wiped out. Although new legislation, which comes in on 6 April, seeks to offer pensioners special protection, as the law stands pensioners are treated as any other creditors. Given that Allders owes Barclays bank £50m of senior debt and Minerva £10m, it is unclear how it would be able to fund its pension liabilities - which could exceed £60m.

Minerva sought to distance itself from any responsibility for Allders' pension deficit. A spokesman said yesterday: "Our legal advice is we have little or no exposure because we haven't been running the company."

Industry sources said Allders' financial position was precarious. Suppliers are understood to be demanding cash upfront and it is thought to have lost its credit insurance.

The collapse of Allders would be a major blow to Mr Green's reputation. The former Burton boy, whose retail peers include the Marks & Spencer boss, Stuart Rose, had hoped to make his fortune at Allders. He took the job two years ago but has failed to arrest the group's sliding profits and sales.