Allders in administration; concessions fear for their future

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.

Allders has today called in the administrators for the second time in seven years. Concessions operating in the store report going unpaid for months

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.”

Harold Tillman: blames Croydon Council for not doing enough since the riots

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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2 Responses to Allders in administration; concessions fear for their future

  1. derekthrower says:

    The local authority must get a grip here. Croydon is losing its identity. First Nestle now Allders.

    What does it want Croydon to become associated with: Lunar House?

  2. It’s heartbreaking to hear that Allders has gone into administration. Most Croydonians have great affection for Allders. It’s a good community citizen and its former director – Max Menon – was very visible in local business initiatives. Despite its trading problems, Allders had the most professional and politest staff of any Croydon retailer.

    Croydon’s retail offering has lost its competitive edge over the last 10 years. A decade ago, Croydon was still competitive against Oxford Street. It offered quality retailers but without the crowds plaguing Oxford Street. In particular, Allders was still the jewel in Croydon’s shopping crown. Allders, together with the nearby C&A clothing store, gave Croydon a relatively upmarket feel. A major refurbishment of the Whitgift Centre had been undertaken during the 1990s. Croydon was ranked the 9th largest shopping destination (by turnover) as recently as 2004.

    However, in 2012, it’s clear that Croydon’s retail centre in general (and Allders in particular) has suffered a serious decline. In the case of Allders, only the ground floor cosmetics department was attracting customers. The lack of investment over recent years was very apparent in Allders’ upper floors. The electricals, furniture and carpet departments were always eerily quiet.

    In recent months, the writing really was on the wall for Allders. Its owner – Harold Tillman – reduced his shareholding to 35%. Allders’ new strategy was to go downmarket. This strategy was never likely to succeed given that the arch discounters Primark and TK Maxx were directly across the street.

    Our Council must take its share of the blame for Allders’ demise in particular and Croydon’s general retail malaise. The Council backed the wrong horse in the absurdly ambitious Park Place redevelopment proposed by the financially weak Minerva.

    The only Croydon retailers who seem to be currently prospering are the discounters – Primark, TK Maxx and the growing number of pound shops. By way of contrast, Croydon’s two remaining upmarket retailers – House of Fraser and Marks & Spencer – are far less busy. Our Council’s decision to sell off most of the town centre’s car parks to NCP is now proving to be disastrous. NCP parking fees are much higher than nearby retail centres such as the Glades in Bromley.

    There has been much local press comment about Hammerson and Westfield’s interest in the Whitgift Centre. Personally, I’m somewhat sceptical. I fear that Westfield has expressed an interest in many sites so as it can play off sellers so as to extract the very best deal. Hammerson is more sincere in its Whitgift ambitions – provided it can secure the centre at a bargain price. Hammerson bought Centrale for a song and I’m sure it hopes to acquire the Whitgift for a similar bargain basement price. A bargain price is possible as 50% of the Whitgift lease has been “inherited” by the Irish government body working out Irish banks’ bad loans. Hammerson’s investment isn’t so much an endorsement of Croydon’s retail vitality but evidence of the rock bottom prices at which Croydon’s existing landlords/leaseholders are prepared to sell at.

    So Croydon’s two iconic businesses – Nestle and Allders – are now either going or have gone. We need no more worthless spin from our Council on visions for a better future but instead bold and decisive action. In particular, our Council needs to persuade both the London Mayor and central government to make a meaningful level of sustained investment in Croydon. If our Council continue to fiddle while Croydon burns, then a surely a downward death spiral beckons.

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