2,500 jobs cut as wholesaler P & H goes into administration

P & H, the largest wholesaler for the UK convenience market, has gone into administration; cutting 2,500 jobs across the UK.

This will affect staff at its head office and across its 14 regional sites, including two depots in Leeds and the P & H Direct site on Broadfield Business Park in Sheffield. The wholesaler, which has around 90,000 customers, also has large depots in Coventry and Haydock, Merseyside.

Its customers range from small local corner stores to the UK’s largest supermarkets and its distribution centres  supply up to 12,000 product lines. P&H Direct provide product delivery services to independent retailers and food outlets.

The group has been by hit by challenging trading conditions in recent months and efforts to restructure the business have been unsuccessful. This has resulted in cash flow pressures and it has not been possible to secure additional funding to support the business.

The P&H Group employed around 3,400 employees and 2,500 immediate redundancies have now been made. The remaining employees will assist the joint administrators in managing the closure of the business.  Currently 450 employees have been retained within the wholesale business.

Matthew Callaghan, Ian Green and Zelf Hussein of PwC were appointed joint administrators. They are continuing to explore options for a sale. In the meantime, the business has ceased to trade.

Mark Jones, food and drink lawyer at Gordons law firm in Leeds, said: “The administration of P&H seemed inevitable. Its been struggling to make money for a while, it lost £17m in the year to April 2016 and over £8m the year before that.
“The business had a heavy reliance on tobacco and tobacco companies. Its largest customer, Tesco, which accounted for 40 per cent of its revenue, just bought P&H’s biggest rival. Notwithstanding the troubles P&H faced, I do expect there to be plenty of bidders for the business.
“You’ve seen Tesco, Sainsbury’s, the Co-Op and Morrisons make moves to grab market share in the last year or so. You can therefore expect one of the large retailers to be interested in this wholesaler, and my money is on Sainsbury’s.”

Callaghan, joint administrator and PwC partner, said: “The Palmer & Harvey name has been a trusted partner for retailers and suppliers for nearly 100 years. This is a devastating blow for everyone who has been involved in the business. The administration team will focus on working with employees, clients and suppliers to facilitate a smooth and effective wind-down or transfer of operations over the next few weeks.

“The P&H Group has faced a challenging trading environment, and the need for significant restructuring has been recognised for some while. The company has insufficient cash resources to continue to trade beyond the short term and the directors have concluded that there is no longer any reasonable prospect of a sale. Therefore, the directors have had no choice but appoint administrators.

“The administrators are working closely with employees affected by the closure of the business to ensure they receive the support they need during this difficult time to assist with their claims for redundancy and other compensatory payments. Our priority is to ensure that all employees made redundant are assisted in processing their claims with immediate effect. We will be circulating correspondence to all staff as soon as possible which will outline the support available to complete redundancy payment forms.”

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