Bakery firm administrators look for rapid sale

Dec 24 2009 by Andrew Mernin, The Journal

ADMINISTRATORS of a collapsed bakery chain said they are looking for a rapid sale of the business after they took over and axed 120 staff.

An expensive rebranding process and poor trading conditions were yesterday blamed for the collapse of Newcastle-based North East Bakery which has now ceased trading.

Administrator Pricewaterhouse- Coopers said it hopes to flush out a buyer for the assets of the firm, which includes 13 shops branded as Nichols on Tyneside and Wearside and a bakery in Newburn in Newcastle.

It said almost all of the staff had been made redundant, although a few would remain in the short-term.

Mark Loftus of PWC said: “Trading has suffered in recent months and the administration is clearly disappointing news for the stakeholders, and employees in particular.

“However, we are looking to secure the rapid sale of the businesses and assets of the company and consequently we are very keen to speak to anyone who might have an interest in acquiring all, or part, of the businesses or assets.”

Workers say that they were told on Tuesday that the shops were shutting and staff had to go home, but had been given no formal notice of the loss of their jobs or been given any details about what was happening to the company.

One worker said: “It was a shock. We haven’t really been told anything. There’s obviously no good time for this but Christmas is about the worst time find out you have lost your job.”

The business had been lauded as a retail success story and its managing director Greg Phillips, 30, had quickly built up the five-year-old business over five years into a £3.5m business. He secured £100,000 venture capital funding this August to open more stores and buy equipment to help increase production for it retail and wholesale businesses.

He won awards including a prize last year of mentoring by Stephen Silvester, owner director of Darlington-based P&A Food Management Services, who later became a director of the firm. Mr Phillips was unavailable for comment yesterday.

Andrew Cotterell, who resigned as a director of North East Bakery earlier this year, said: “I am just heartily sorry for Greg and Steve and all those staff who have lost their jobs.” Mr Cotterell took over ownership of the firm’s Hexham and Corbridge shops, which are now run as a separate business and remain unaffected.

Other bakery firms in the region have moved quickly to supply retailers which may have been left short of stock following the closure of the firm. One of these includes Nichol & Co, an unconnected firm run by John Phillips, who is Greg Phillips’ uncle.