For the second time in seven years, Allders has gone into administration, putting nearly 1,000 jobs at risk and pushing small businesses to the brink.
The concessions which operate inside Croydon’s landmark department store may be forced to fold, since several have gone months without Allders handing over their businesses’ takings.
Many of the counters in Allders operate as separate, independent traders under the department store’s roof. Their daily takings are returned to the store each day, with the concession supposed to receive a cheque at the end of the month, less deductions for the use of Allders’ facilities.
In the case of one small family business which has operated successfully in Allders for seven years, they would normally expect to make around £5,000 per month, the bulk of which is paid out on wages and to buy new stock. Yet according to the owners, they are now owed “in excess of £20,000″ by Allders, having received just £2,000 from the store since the end of January.
“It’s left us unable to pay any staff wages or our suppliers,” the business told Inside Croydon on condition of confidentiality.
“They’ve kept up their payments to the larger concessions, probably because they felt they had to. But us smaller businesses, they’ve just ignored. We’ve had no answers when we’ve gone to the finance department, and certainly no money.
“The arrangement with Allders always worked very well, and concessions like ours created a lot of part-time jobs for local people. It all seems to have started to break down about six months ago, when we were told that the banks cut Allders’ overdraft.”
Allders held a meeting yesterday with the concessions, but it did not allay the fears of our source. This morning, management announced it was calling in the administrators.
“It looks like we’re going to lose a lot of money,” the concession owner said.
As Inside Croydon reported earlier this week, Allders was seeking an emergency “rent holiday” from landlords Minerva to tide the store over difficult trading conditions. They also sought some relief from Croydon Council on their business rates.
Harold Tillman, the fashion entrepreneur who rescued Allders from administration in 2005 and still owns a 35 per cent stake in the business, yesterday blamed Croydon Council for letting down local traders in the aftermath of the riots last August. “The business has not recovered since the riots,” he said.
“Unfortunately, nothing has been done by government or the council to help. Croydon Council has not done what they should have done.”
Historically, the Christmas period is when Allders does the bulk of its annual trading. But this time of year is also key to its business plan, since many of the cosmetics and perfume brands, which dominate the ground floor of the 150-year-old store, insist on Christmas stock orders being placed now, and paid for in advance.
With the business cash-strapped, insiders suggest that Allders faced the grim prospect of Christmas trading with its high-margin perfume shelves almost empty.
Administration appears to be Croydon’s only growth business at the moment: Duff and Phelps were appointed this morning, the company issuing this statement: “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.”
“This is a significant blow to the town,” said Mike Fisher, the Tory leader of Croydon Council (to cries from across the borough of: “No shit Sherlock!”).
With around 850 full- and part-time jobs at risk, Fisher went on to say, “We are determined to ensure that our regeneration plans remain on track.”
A spokesman for Croydon Council said: “We are 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.
“As well as discussions with key parties, the council offered to defer business rate payments. 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.
“The council’s first priority will now be to work with the administrators to see if we can create a future for the store.”
The store remains open for business, while the administrators and management seek investment or a new buyer for the business, which has managed to trade through two world wars and the Great Depression of the 1930s since it first opened in Croydon in 1862.
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