UPDATED: Ethel Austin, which was bought out of administration in 2008 by former MK One boss Elaine McPherson, hit the buffers today after being unable to gain banking facilities, with a poor January’s trading sealing its fate.
Corporate restructuring business MCR has been appointed administrators to Ethel Austin Limited and homewares chain Au Naturale Limited, which together have 300 stores and 2,500 employees.
MCR partners Geoff Bouchier, David Whitehouse and Philip Duffy were appointed joint administrators today and said that they could not rule out store closures and redundancies.
Bouchier said: “The joint administrators are trading the companies in administration in the short term with a view to finding a purchaser for the businesses as a going concern. In the current economic climate there are no guarantees that purchasers will be found. We are reviewing the financial position of the companies and are at this stage, unable to rule out store closures and redundancies.
“There is no doubt in our mind that the onset of the global economic crisis has hit the retail sector particularly hard. As a consequence of this the companies have struggled to secure funders, which in turn has impacted their ability to generate sales revenue.
“This has been compounded by poor trading conditions in January attributed to the adverse weather conditions, which severely restricted the companies’ cash flow. The companies have continued to seek additional finance up until very recently but without success.”
But a source close to Ethel Austin added: “We hope this will lead to the firm being put on to a sustainable footing.
“The continued hurdle of having no credit facilities or trade credit insurance continued to put a strain on the company’s working capital. Elaine’s objective now is to secure the jobs of the staff at Ethel Austin, who have done a great job since she took over the business in 2008.
“She will therefore be working with the administrators to find the best solution for all the company’s stakeholders.”