Allders to be broken up as rivals prepare to snap up sites
Monday 07 February 2005
Administrators battling to save Allders as a going concern have admitted defeat and have decided to break up the business and sell off as many of its 45 department stores as possible.
Its Oxford Street store in London looks set to close, along with nine others that have failed to excite any interest from potential buyers.
Rival retailers were circling last night, including Debenhams, Primark and Philip Green, owner of Bhs, who have made no secret of their interest in buying Allders' stores.
The department store chain collapsed into administration last month with debts of at least £150m. Its chief executive, Terry Green, left the company without any compensation. Administrators working for Kroll were appointed to salvage the business, and have received 36 separate bids for the group.
Andrew Pepper and Alastair Beveridge, the joint administrators of the company, said in a statement yesterday: "Whilst we had hoped to secure a going concern sale for the entire business this has not been possible. However, we are now progressing discussions with buyers who are interested in 35 of the 45 stores."
Despite strong consumer demand for most of the past few years, the chain has struggled to compete with more effective competitors on the high street.
The administrators said they were in detailed talks with buyers for individual stores, with transactions planned to be completed as soon as possible.
It is expected that the staff at the Allders stores being sold will transfer to employment with the new owners.
"Whilst these negotiations are being progressed all 45 stores will remain open and trading will continue," said the administrators.
However the outlook is bleak for workers at the 10 Allders stores that have failed to generate interest from buyers. Closing down sales at these sites began on Saturday as preparations began to wind down their operations.
"We are still willing to consider offers for these 10 stores and would encourage parties interested in these particular outlets to come forward and make their interest known immediately," said the administrators.
"We commenced these sales yesterday [Saturday] to maximise sales on what is the busiest day of the week for the stores. We are not making any redundancies at any of the stores at this time and have updated the store managers of today's news to ensure that they and their staff are kept informed of developments."
Mr Pepper and Mr Beveridge said that they were continuing to review all options for Allders' headquarters in Croydon.
The stores not included in the talks with bidders are: Bolton, Chelmsford, Horsham, Ipswich, Kingston, Leeds, Oxford Street in London, Reading, Romford and York Clifton Moor.
The team from Kroll are investigating the trading of the Allders group in the lead-up to administration, as required by law. Where the blame lies for the collapse is becoming an increasingly bitter debate. Some are blaming the company's financial backers, including its banks, for failing to keep a recovering business going long enough to benefit from an upturn in trading, while others blame management decisions.
Allders is not the first retailer to fail recently. Courts, the furniture business, closed its chain of 88 stores in December, and appointed administrators from KPMG.
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