| Ethel Austin staff face uncertain future |
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| Written by Adrie van der Luijt | |
| Tuesday, 15 April 2008 | |
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Ethel Austin, the 300 store discount retailer based in Liverpool, has gone into administration.
Philip Duffy and David Whitehouse, partners from Menzies Corporate Restructuring (MCR), have been appointed joint administrators to the retail chain. The business, which started life as a Liverpool wool shop back to 1934, has established itself as a leader in the value clothing retail sector and has 300 stores throughout the UK, from Scotland to the South West and South East of England The latest annual turnover for the company is in the region of £150 million and the company employs around 2,800 staff throughout its stores and the Knowsley-based HQ in Liverpool. The business was founded in 1934 by Ethel Austin in the front room of her terraced house in Liverpool. Her son Ronald helped turn the company into one of Britain's biggest value clothing retailers. Ethel Austin's store fronts have become a feature of many high streets around the country. In June 2002, the Austin family sold the business to a management team backed by Lloyds TSB Development Capital (LDC) for £55 million. Less than two years later, ABN-AMRO Capital bought the business for £122.5 million. Duffy said that it was too early to be certain about the exact reasons for the financial difficulties at this stage. He added that the joint administrators' primary concern was to ensure that the business continued to trade in the coming weeks and that a suitable buyer was found. Despite the current challenges faced by the retail sector Duffy remained confident that a buyer could be found. "Ethel Austin has a good brand and good customer base and this, together with its national coverage, should make it an attractive opportunity for a retailer. We appreciate that this is a worrying time for staff and are therefore keen to keep them informed of progress,” Duffy concluded. John Gorle, national officer of the Union of Shop, Distributive and Allied Workers (Usdaw), said that the announcement that Ethel Austin had gone into administration did not come as a complete surprise. We’ve been aware for sometime of the financial difficulties of the business. However, we had been hopeful that refinancing of debts would stave off administration, so this news is a tragedy for all involved and employed by the business. “We will now be working closely with Ethel Austin and administrators in an attempt to secure the employment of as many members as possible," Gorle concluded. Menzies Corporate Restructuring is the corporate restructuring and turnaround division of Menzies Chartered Accountants. It was formed in April 2001 to offer turnaround, restructuring and insolvency services of outstanding quality to banks, lenders, business owners and individuals in the mid-market sector. Related articles
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