Deathwatch: More stores and jobs axed at Ethel Austin - but just how unhappy are the adminstrators?
Struggling cut-price fashion retailer Ethel Austin has sunk further into the mire with the news that administrators MCR are closing 114 stores by the end of the week, with the loss of over 1,000 jobs.
469 distribution and head office staff were also laid off earlier in the month. A spokesman for MCR said that the chain’s remaining 162 stores would continue to operate as usual while he looked for a buyer for the rest of the business as a going concern.
But the question as to how many companies really need to go into administration is continuing to be asked. Private Eye recently reported on the financial fall out from the collapse of Woolworths in late 2008, highlighting a major conflict of interest.
The Eye claim that when Woolies got into trouble, their chief executive Steve Johnson hatched a plan to prevent administration by selling the stores to a “turnaround specialist” company, Hilco. This plan was rejected by Woolworth’s banks’ advisor, Deloitte and the banks duly put Woolies into administration. The administrators who got the job of grinding Woolworths into the dirt? That would be Deloitte.
The recent publication of the Woolworths administration report shows that the banks were repaid everything they were owed in full and Deloitte’s three partners and their staff got £9.3 million for their hard work. Even poor Hilco got a piece of the tragic action, pocketing £8.44 million as advisors to the administrators.
Oh, but what of the thousands of staff who lost their jobs over the Christmas 2008? They received the bare legal minimum statutory redundancy pay, averaging a week’s wages per year of service. Ouch.