Hundreds of jobs at risk as administrators called in at historic Somerset firm
The future of one of Somerset’s oldest businesses has been thrown into doubt after the administrators were called in.
Around 150 people currently work at the 200-year-old leather manufacturer Pittards in Yeovil. Another 900 staff are employed at a subsidiary in Ethopia.
Advanced talks are underway to sell the business but there are fears that it could be closed down if a deal is not agreed.
In July, the company told shareholders it had failed to secure the necessary funds to keep it afloat and was looking to find a buyer.
The company said the recent crash in the pound, rising interest rates and inflation have caused it serious difficulties.
Last month Pittards filed a notice of intention to appoint administrators to provide protection against creditors.
Chief executive of the group, Reg Hanky, took over the business in 2007.
The firm had been aiming to raise funds through corporate investors to raise £1.16m in capital.
It was part of a deal to secure millions more in overdraft funds with its bank over the next two years.
But it did not hit its target, instead raising just over £300,000, which will now be returned.
A statement was issued last night to Stock Market regarding the latest development.
It said: “Further to the announcement on 8 August 2023, which noted the intention to appoint administrators from Ernst & Young LLP as Joint Administrators to the Company (‘the Joint Administrators’), the Board confirms that these appointments were made today and that Lucy Winterborne and Daniel Hurd of Ernst & Young LLP will act as Joint Administrators
“The Joint Administrators are at an advanced stage of negotiations to sell the Company’s business and assets (including its Ethiopian subsidiaries). The transaction is expected to formally close no later than 6 September 2023. If the transaction cannot be concluded the Joint Administrators will assess available options to realise value for the company’s creditors
“The Joint Administrators will be contacting shareholders in due course with further information on the Administration of the Company and the sale of its business and assets.”
Lucy Winterborne, Joint Administrator at EY-Parthenon, said: “Pittards has been one of the UK’s leading manufacturers of leather goods for over 100 years, but a difficult retail environment saw the Company suffer a substantial reduction in demand in 2022 due to customer overstocking. This had a significant impact on the Company’s profitability and cash flow.
“We are working hard to conclude a sale of the business and hope to provide more certainty in the coming days.”
The TUC’s regional secretary in the South West, Ines Lage, added: “The current Government must do more to protect good local jobs and support businesses like Pittards in the face of ongoing economic pressures. Inflation is still too high and it is deeply affecting local communities, businesses and workers.
“This situation is a painful example of what happens when ministers make disastrous and irresponsible fiscal decisions, such as last year’s budget, which collapsed the Pound Sterling on international markets.”
