Allders in Croydon goes into administration

ALLDERS department store in Croydon has gone into administration.

Staff at the 150-year-old North End business were told the news in a meeting this morning.

The store employs about 850 staff in full and part-time roles.

Allders blamed the decision on 'tough market conditions' in the UK, and said it remained hopeful of investment or a sale.

The store remains open for business and outstanding customer orders will be fulfilled, the company said.

In a statement, the company said: "The board of Allders has today taken the decision to place the company into administration following a marked downturn in sales brought on by the well-publicised economic difficulties facing the UK."

Director Andrew McKenzie said: “Whilst our funders, shareholders and concession partners have been supportive throughout and the ongoing restructure was progressing, the tough market conditions in the UK retail sector have forced the board to appoint administrators in order to protect the business and its creditors.

"We will now work with the administrator to continue ongoing discussions with funders and other interested parties in the business.

"With the considerable support already given by Croydon Council and our landlord Minerva, I would hope that additional investment or a sale can be achieved."

A spokesman for Minerva said: "Since they approached us on 6 June, we have been engaged in a proactive dialogue with both the management and shareholders of Allders in a concerted effort to try and save the business.

"We responded quickly and constructively to the concession requested. We are very disappointed that, even with our offer to assist, the board of Allders has been unable to conclude that the business is viable going forward and administrators have therefore been appointed."

A Croydon Council spokesman said the authority was disappointed with the news, but promised to do all it could to help the store and its staff.

Council leader Mike Fisher described the news as a 'sad day for Croydon'.

"The council has been working very closely with Allders to prevent the store going into administration," the authority's statement said.

"It [the council] is disappointed that, despite best endeavours within the very short time that was available, it has been unable to prevent this because of the store’s inability to raise working capital."

The statement added: "It’s very unfortunate that Allders did not seek help from the local authority until after it had secured a notice of intention to appoint an administrator."

Croydon Council will be working with administrators, the spokesman said, and was 'exploring every opportunity' of keeping the store open.

The authority is also putting together an 'advice and support team' for people and other businesses that would be affected if Allders closed.

"This is a significant blow to the town, and it';s particularly sad that this situation has arisen in the year that Allders has been celebrating 150 years of trading in the borough," said council leader Mike Fisher.

"Like the rest of the country, Croydon is grappling with very difficult economic conditions and reduced spending power, and this shows how even the most long-established institutions are potentially threatened."

However, Cllr Fisher emphasised that the regeneration of Croydon remains 'on track'.

"Whilst there is no getting away from the fact that this is a very sad day for Croydon, we remain optimistic for the future of retail in the town," he added.

"Two of the country's largest retail developers remain keenly interested in our main shopping centre, Whitgift, and only a few weeks ago we approved Hammerson's plans for the remodelling and expansion of Centrale.

"We are determined to ensure that our regeneration plans remain on track.

"And with new residential and business space already under construction, I still believe we are well-positioned for when the economy as a whole begins to grow again."

It is understood Mr MacKenzie, who took a 70 per cent controlling interest in the business with two partners just four months ago, had been asking landlord Minerva for a rent-free period and Croydon Council for a rate-free period.

Croydon Council said it had offered to defer Allders' business rate payments.

Allders was saved from administration in March 2010 after Lord Mandelson helped the store come to a financial deal with NatWest bank.

More to follow