Up to 3,000 jobs were put at risk yesterday when Dillons, one of Britain's best-known booksellers, and Rymans, the stationers, collapsed into receivership.
The collapse was announced yesterday morning after talks between Pentos, the heavily indebted company that owns the Dillons, Hatchards and Claude Gill bookshops and Rymans, failed to secure additional finances from its bankers after late-night talks broke down.
The 149 bookshops opened later than usual yesterday morning after the 2,500 staff were told of the news. However, the receivers from KPMG, the chartered accountancy firm, said they were confident of finding a buyer soon for the loss-making chain and that the shops would continue to trade normally. So far no staff have been made redundant.
Commenting on Dillons' future, Stephen James of KPMG said: "We are aiming to sell all parts of the business as going concerns. Dillons is an extremely well-known, high-street name with an outstanding reputation throughout the UK."
The future of the 500 Rymans workers was thought to be less secure as the company's 110 outlets are still making heavy losses and suffering from fierce competition at the hands of out-of-town operators such as Staples and Office World.
There is also a fear that some small publishers may be forced to the wall as a result of Dillons' demise. Pentos had been asking its suppliers for more time to pay its bills and some publishers are thought to have been waiting for months for their money. Penguin said yesterday that some of its smaller units had taken out insurance policies to cover them in the event of the collapse of the retailer.
A spokesman said: "The writing has been on the wall for Dillons for some time. Most publishers have been limiting their exposure to them but there is bound to be a small publisher out there somewhere who will come a cropper."
Dillons was founded in 1936 and became part of the Pentos group in 1977. The group has been experiencing difficulties since 1992 after a period of rapid expansion in the late 1980s saddled the company with expensive shop leases signed at the height of the property boom. Debts reached £55m and an emergency refinancing in 1993 failed to put the company on a more stable footing.
More recently, the company's new management has been fighting to save the chain by cutting prices and seeking more relaxed credit terms from suppliers. In December, Pentos attracted criticism when it forced its Athena chain of greeting card and poster shops into receivership with the loss of 600 jobs.
Terry Maher, the Pentos founder who was ousted from the company in 1993 and who many blame for the company's problems, spoke bitterly yesterday of the company's demise. He said: "I am very disappointed. The current management can blame me for events up until 1993 but not for anything that has happened afterwards. I built up a successful chain and ran it for 21 years. What have they done?"
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