Allders placed in administration
Future of department store group uncertain
Allders has been placed in administration after owner Minerva bowed to the inevitable.
Minerva issued a statement late on Wedneday confirming that Allders Department Stores Ltd and Allders Stores Ltd have been placed into administration by their directors. The companies are owned by Scarlett Retail, in which Minerva, banker Lehman Brothers and Allders chief executive Terry Green all hold stakes.
Minerva, which has been looking for a buyer for the 45 store group, said its is “disappointed by the failure of the sales process and the resulting administration, as it has worked very hard in its attempt to secure the future of Allders as a going concern.” It added that it will be cooperating with the administrators in all respects.
While there are a number of potential buyers for all or part of the 45-store group, the company’s banks, led by Barclays, appear to have come to the view that some interested parties are waiting for administration before making a move. Debenhams has indicated that it might buy some stores, as has discount retailer Primark.
Concerns about continuing trading problems, with like-for-like sales down 2 per cent over Christmas, as well as the retailer’s pension liabilities, have caused the bid process to stall. Lehman Brothers increased the prospect of administration last week by selling on its debt in Allders to a company linked to recovery specialist Hilco.
[img r]allderscroydon25.jpg[/img]The move into administration raises concerns about Allders’ 5,700 employees as well as the 2,500 members of its pension scheme. Minerva said it “has been advised that it has no liability for the pension fund deficit and that any action which may be taken against it by the new pension regulator is unlikely to succeed.
“At no time has any director or employee of Minerva had any involvement with the pension scheme, which has at all times been administered by independent trustees.” It added that since Minerva acquired its shareholding in Scarlett Retail, the deficit in the pension fund has been significantly reduced.
