Axe falls on 850 jobs at Allied Carpets

Published on Friday 14 August 2009 21:38

MORE than 850 jobs have been axed after administrators for Allied Carpets called time on the bulk of the failed retail chain.

Ten Scottish stores are among the 142 that have been shuttered by BDO Stoy Hayward after it failed to find a buyer amid fears over tough trading.

The future of 120 jobs still hung in the balance last night as the firm sought to offload the remaining 20 outlets still in administration.

Allied collapsed last month after the housing slowdown hit on the demand for carpets and flooring products. The move left 21,000 orders still outstanding.

BDO has already sold 55 stores to a new firm – Allied Carpets Retail Ltd – set up by former Allied chief executive Clive Hutchings.

Administrators yesterday said they remained hopeful of selling the remaining stores that are still trading. Talks were also taking place to try and secure alternative occupiers for those in the latest wave of closures.

North of the Border, Allied stores in Bishopbriggs, Cumbernauld, Dumfries, Dundee, East Kilbride, Falkirk, Kilmarnock, Livingston, Renfrew and Wishaw have been shut down affecting an estimated 60 jobs.

Dermot Power, a business restructuring partner at BDO, said: "Although we have had a strong level of initial interest in the portfolio, the common concern has been around the lack of visibility of future turnover.

"In addition, many of those who operate in the same industry haven't been comfortable taking the step to extend their current portfolio in such a tough trading climate."

Ex-chief executive Hutchings is hoping to revive the brand after his deal to buy 55 of the stores and the firm's insurance inspection arm.

He said on completing the purchase in mid-July: "Allied Carpets is a good business and, through this sale and additional funding, both the retail and inspections businesses now have the opportunity to strengthen their market positions, build on the Allied brand and ensure an ongoing commitment to unrivalled customer service."

Hutchings' efforts to buy up stores have helped protect some 425 jobs and BDO said it was "likely" more outlets and jobs would be transferred to the new outfit in the next two weeks.

However, those jobs saved so far account for less than a third of the original 1,500-strong workforce at Allied Carpets.

Allied is among a string of household names to have fallen victim to the worst recession since the Second World War. Other high-profile retail failures include Woolworths, MFI and music chain Zavvi.

&#149 Administrators were last night optimistic about their chances of finding a buyer for outdoor activities company Scottish Game Book, which has slipped into administration. The company ran the Kingscliff Sporting Lodge near Ellon, in Aberdeenshire.

Joint administrator Iain Fraser, of Tenon Recovery in Aberdeen, said it had suffered from cash flow problems and a fall in demand from corporate customers.