Allders' collapse puts 5,700 jobs at risk

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The Independent Online

The department store group Allders finally collapsed into administration yesterday, putting the future of its 5,700 employees into doubt.

The department store group Allders finally collapsed into administration yesterday, putting the future of its 5,700 employees into doubt.

The administrators at Kroll declared themselves "hopeful" that they could sell the 138-year-old business as a going concern rather than break up the group.

Hilco, the corporate recovery experts that bought up most of Allders' debt last week at a massive discount, was on standby last night to run the company while Kroll seeks a buyer. Kroll said it had received 10 expressions of interest so far. Andrew Pepper, a partner at Kroll, said: "This level of interest so early makes us hopeful that a going concern sale can be achieved."

A mystery private equity bidder made an 11th-hour proposal to buy Scarlett Retail, Allders' holding company, but no deal was done. Alchemy, the private equity firm, has already declared its interest in acquiring Allders. Meanwhile, several other retailers, including House of Fraser, are circling in the hope that they can acquire some of Allders' prime sites.

The decision to seek administration raises a question mark over the pension rights of its employees. Minerva, the property company that owns 60 per cent of Scarlett Retail, insisted it had "no liability" for the pension fund deficit. Although the pension shortfall is understood to be about £7m, the company's total liabilities are thought to amount to £60m. Kroll said it could offer no guidance on whether Allders' pensioners would be left out of pocket. Terry Green, the chief executive of Allders and 10 per cent shareholder, is not thought to be affected as he does not have a pension with the company.

Mr Pepper tried to reassure Allders' customers that they did not face a repeat of the recent fiasco at Courts, where thousands of customers lost out after the furniture retailer went bust. "We will make every effort to honour commitments made," he said.

Separately, the French group Etam Developpement admitted that its loss-making UK stores could be sold off after trading deteriorated over Christmas.

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