Hundreds set to lose money in Empire Direct collapse

Hundreds of consumers are likely to be left out of pocket because of the collapse of electrical goods retailer Empire Direct, it was revealed today.

Business restructuring firm KPMG said 5,800 customers had not received their orders. Of these, 4,800 paid by card and, using banking industry data, the administrators estimate that just over 4,000 of these will be able to claim a refund from their card issuer.

The remaining customers will become unsecured creditors of the company and can lodge a claim with the administrators, although a payment is not expected.

The Leeds-based company traded mainly online but also had 14 UK shops, which have closed, while 158 of its 350 employees have been made redundant.

Empire Direct's small print stated that the customer does not take ownership of goods ordered until delivery or collection.

Nor will any refunds be paid, because of the retailer's lack of funds when it entered administration - the money paid by customers went into its overdrawn bank account.

Mark Firmin, KPMG restructuring partner, said: "The customer phone line we established on Tuesday has received 1,000 calls a day from concerned customers and so I am very aware of how regrettable this situation is for many customers of Empire Direct.

"Those who have paid by card should contact their card provider to establish whether they are entitled to a refund. We will be working with the card providers to facilitate refunds."

Administrators said they have received 159 expressions of interest in the company's assets from potential buyers ranging from "major international businesses to corner shops".

No more redundancies have taken place since those announced earlier in the week.

KPMG advised customers who paid Empire Direct using a credit or Visa debit card to contact their card issuer or finance provider for a refund.

Any customers who need proof that their order was not delivered can download a letter from the administrators, while those who do not have a possible refund coming from a card issuer can lodge a claim as an unsecured creditor, with the relevant documents available at http://www.empiredirect.co.uk.

The company had been established for 25 years and marketed itself as the UK's largest independent retailer of electrical goods with a turnover of £150 million.

But it was severely hit by the economic downturn and saw a "significant reduction" in sales from the middle of last year, according to administrators.

The business suffered further when credit insurers withdrew cover in October, while low stock levels and operating losses meant it could not continue to trade in administration.

Empire Direct's stores were in Bolton, Bradford, Chingford, Derby, Doncaster, Dudley, Huddersfield, Leeds, Loughborough, Nuneaton, Romford and Wetherby.

KPMG was also appointed to its subsidiary Empire Property (UK) Ltd.