Century-old Whittard of Chelsea on verge of administration

It has emerged this afternoon that the tea and coffee retailer, Whittard of Chelsea, owned by stricken Icelandic investor, Baugur, is on the verge of administration.

Accountancy firm, Ernst & Young, has been lined up as administrator, however, the company has not been officially appointed. Crisis talks have been taking place but a buyer has not yet emerged.

The company faces a multi-million pound rent payment later this month for the first quarter of 2009.

The group has been hit by poor sales due to the economic downturn as shoppers opt for cheaper alternatives.

The group, which sells tea, coffee and crockery, has nearly 130 stores and has a workforce of 500. It was founded as a family business by Walter Whittard in 1886, trading at 165 Fleet Street, London.

However, it is unknown whether the group will do a pre-pack application or a full-blown administration. A pre-pack is when a company is typically put into administration and the business is sold shortly after the appointment of the administrator.

Retailers have been anticipating their worst Christmas period for years and have been tempting shoppers with discount days and December sales.

Over the weekend, insolvency expert Begbies Traynor warned that more retail chains will go bust before the middle of January.

Begbies said it would not be surprised if between 10 and 15 well-known chains did not make it beyond the festive period.

Should its warning ring true, then more retail workers will face 2009 jobless.

Story link: Century-old Whittard of Chelsea on verge of administration