ModelZone has fallen into administration, officially appointing Deloitte and putting 47 stores and 400 jobs at risk.
Deloitte partners Richard Hawes, Nick Edwards and Rob Harding have been appointed administrators to Modelzone Holdings and certain subsidiaries, including its wholesale arm Amerang Limited. Both companies are headquartered in Lancing, West Sussex.
Hawes said that ModelZone had historically been profitable but the retailer has recorded losses over the last two years due to loss-making new stores combined with growing online competition.
“The board of directors has now concluded it is unsustainable and sought the appointment of administrators,” Hawes said.
“We are working closely with customers and employees to ensure the business has the best possible platform to secure a sale, preserve jobs and generate as much value as possible for all creditors,” he added.
Amerang, which operates an 80,000 sq ft warehouse, is profitable but it has been pulled into administration with ModelZone to “protect the value of the business”, according to Hawes.
“Amerang remains profitable and we will continue to trade as normal while we seek a buyer for all or parts of the business as a going concern,” he added.
Deloitte said gift vouchers will be honoured towards 50% of the purchase of goods.
Model railway manufacturer Hornby has reassured its shareholders that it is financially secure after ModelZone’s collapse today.
Hornby said: “Modelzone is an important business partner and although the news of the administration is disappointing, our account management team has been well abreast of Modelzone’s challenging trading situation and has been able to manage our financial exposure at an acceptable level.”