Member Article

Nearly 80 jobs in danger as retailer Internacionale UK enters administration

Around 80 North East jobs are in danger as retailer Internacionale UK Limited has entered into administration.

The womens’ clothing chain with stores in Hartlepool, Metro Centre, Newcastle, South Shields, Washington and Sunderland, was formed from the previous administration of Internacionale Retail Limited in July last year.

At the time a pre-pack deal organised by administrators EY safeguarded 114 stores and over 1,500 jobs. At the time, the business had been significantly loss making for a number of years.

Internacionale had since downsized its store network to 89 outlets across the UK, employing around 1,000 staff.

Joint adiminstrators at PwC say the firm had not grown as anticipated and increasing creditor pressure, particularly from rating authorities and landlords, meant shareholders decided they can no longer support the business.

Earlier this year a turnaround and contingency plan was intended to secure support for the business until late March, when the company’s ongoing viability would be reassessed. As part of an interim cost cutting exercise, 90 redundancies were recently made, mostly at head office.

Bruce Cartwright, joint administrator and partner at PwC said: “The company directors have worked with key stakeholders to try and find a solution to preserve the business. However, these efforts have proved to be unsuccessful against the backdrop of a fiercely competitive retail sector which, despite the improving economic conditions, can be unforgiving to businesses in financial distress.

“We are currently working with management to agree an orderly wind-down of the company, but we welcome any approaches to purchase parts of the store portfolio and safeguard jobs.

“We intend to continue to trade over the coming weeks in order to sell as much of the retail stock as possible and maximise the return to creditors. Staff have been –and will continue to be- paid for their work.

“Unfortunately, unless a willing purchaser for the business or store portfolio is forthcoming, it is inevitable that redundancies and store closures will become necessary as the administration process continues. The company and the administrators are making every effort to help staff through this difficult transition.”

This was posted in Bdaily's Members' News section by Tom Keighley .