Threshers owner First Quench has plunged into administration. Where does that leave its some 6,200 staff?

Threshers owner First Quench Retailing finally fell into administration last night. And for most of those close to the situation, it was no surprise.

First Quench has been teetering for some time and while the company had outlined its business transformation plan, the recession hit it hard, and the withdrawal of credit insurance caused continual supply problems.

Over 6,200 staff work for First Quench, who now all face redundancy in the run up to Christmas. While the administrator is seeking a buyer, many of the stores who have contacted Retail Week are loss-making, so what future do they have?

The other issue is the franchisee stores. There are around 90 shops run on a franchise basis and as separate legal entities, they fall outside of the administration. KPMG has said it will support the franchise stores throughout the process as much as it can but their future looks bleak.

Retail Week has been contacted by an unprecedented number of franchisees over the past few months because of the supply problems at the group. They have complained that more than 40% of stock fails to turn up on each delivery and when they contacted head office, they don’t get much of a sympathetic ear.

While First Quench - owned by Vision Capital - has clearly been battling many problems, if the retailer’s management was more upfront with the franchisee partners, many of them may not be facing personal bankruptcy now.

The franchisees paid their money upfront for use of the Threshers brand, and for a long while many operated profitable businesses. But they relied on the supply of the right products – for which they paid Threshers by direct debit each month. And when credit insurance was removed, this fell apart.

Many franchisees complained that company owned stores received stock ahead of their own when supplies were low. Whether or not this is the case, franchisees were still left with little that sells well.

Perhaps if communication was better then the management would have been able to understand what sells well in each of the individual stores, and work to deliver that to them. It’s not the retailer’s fault credit insurance was removed, but franchisees feel it is the company’s fault for sticking its head in the sand.