PARCEL delivery company City Link, which employs 2,727 workers, has gone into administration.
The Coventry-based company, which is owned by investment firm Better Capital, called in administrators from professional services firm EY on Christmas Eve after years of “substantial losses”.
EY said it expected “substantial redundancies” over the coming days because no buyer had been found to save the troubled company.
Operations have been suspended at all its depots until Monday, when customers and recipients will be able to collect their parcels.
Hunter Kelly, joint administrator to City Link, said: “City Link Limited has incurred substantial losses over several years.
“These losses reflect a combination of intense competition in the sector, changing customer and parcel recipient preferences, and difficulties for the company in reducing its cost base.
“The strain of these losses became too great and all but used up Better Capital’s £40 million investment, which was made in 2013 and intended to help to turn around the company.
“Despite the best efforts to save City Link Limited, including marketing the company for sale, it could not continue to operate as a going concern and administrators were appointed.
“We have temporarily suspended operations at all transport hubs and depots until Monday December 29 2014, when we intend to reopen depots to the public to enable customers and intended recipients to collect their parcels.
“We will also provide support to employees relating to potential redundancies. We are now beginning the process of realising the company’s assets.”
SUBSCRIBE TO THE SCOTSMAN’S BUSINESS BRIEFING