The leader of Croydon Council has said that Allders cut off the possibility of a council-led rescue bid by not revealing the extent of its financial crisis earlier.
Council representatives, along with the Greater London Authority and Allders’ landlord Minerva met the retailer’s chief executive Andrew Mackenzie yesterday at a crisis meeting organised by business minister Mark Prisk.
At that meeting the council proposed investing in Allders, but that option then had to be ruled out because the famous department store had filed its intention to appoint an administrator at a Bristol court last Friday.
Croydon Council chief executive Jon Rouse said: “We could not invest in an insolvent business - EU rules prevent it.”
Leader of the council Mike Fisher added: “They left it too late. Had they come to the council months ago, and had they not had such a long list of creditors, we would’ve looked to invest in the business. They left it so late as to make it impossible.”
The council was first informed of Allders’ financial difficulties on Monday this week.
Fisher said questions needed to be answered about the retailer’s lack of communication with creditors and a lack of clarity over its ownership structure when it collapsed.
It was reported in January that Mackenzie had led a management buyout Allders, leaving former majority stakeholder Harold Tillman, who had rescued the business - at that time a chain - from administration in 2005, with a 30% stake. However it remains unclear whether or not that deal took place.
Fisher slammed comments made by Tillman yesterday about a lack of support from the council following last year’s August riots as “completely and utterly baseless”.
He said: “I find his comments incredible. We’ve never received any approach for help since August last year [when Croydon was one of the areas worst hit during the riots that hit English cities].”
The council said it had offered Allders a holiday from business rates until January next year after hearing about its financial problems this week, and that it is prepared to extend the offer to any new owner of the store if needed.