Entertainment Rights cuts jobs as Woolies collapse hits trading
Tuesday 09 December 2008
Entertainment Rights, the children's television group which owns the rights to Rupert Bear and Postman Pat, is to cut a third of its workforce as part of a rescue plan that also includes an emergency loan to see it through Christmas.
The group, which also makes DVDs and games, revealed yesterday it faced significant losses following the collapse of Woolworths, one of the largest customers of its UK entertainment business.
Entertainment Rights also said Deborah Dugan, the head of its US arm, would take over as chief executive following the decision of Nick Phillips last week to step down after just nine months in charge.
Ms Dugan, a former EMI executive who served as president of Disney Publishing Worldwide before joining Entertainment last year, said: "I'm coming into the company when it's not in the best position – it needs a lot of careful management attention, and the first thing is securing financial stability."
She announced the group was to axe 50 of its 150-strong workforce by the end of the year as part of its plan to save £5m. "We are highly focused on cutting costs," Ms Dugan added.
Shares in Entertainment Rights leapt by a quarter yesterday after the company announced that it had secured a £13m short-term loan from HBOS, its main lending bank.
The move was made to "cover potential cash flow shortfalls" until the end of February and it remains in discussions with the bank over longer-term funding arrangements. Edward Knighton, chief financial officer, called the loan a "substantial vote of confidence". There had been fears the group had breached its banking coven-ants last week, and one insider admitted that securing the loan had been "touch and go".
Nevertheless, the company faces a difficult few weeks, warning that Christmas sales "will be lower than expected" and that shipment of goods would be later than anticipated. Entertainment Rights said that when Woolworths and its distribution business Entertainment UK had gone into administration, it owed the company £800,000. "The directors are actively seeking clarification as to the recoverability of this sum and the effect of the potential loss to the company," it said.
Entertainment Rights is currently exploring its options with other retailers, including supermarkets, who could replace the Woolworths business which would otherwise be lost.
Yesterday also marked the departure of a second senior manager in a week. Jane Smith, the company's chief creative and commercial director, left "to pursue other opportunities" after nine years at the group.
Ms Smith, who will not be replaced in the short term, is credited with reinventing Postman Pat.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...