Former boss linked to Allders bid

A former boss of Allders is preparing a bid to save the ailing UK department stores group from administration, it was reported today.

Harvey Lipsith, who was ousted as chief executive of the group in 2003, is understood to be working with advisors and could table an offer as early as tomorrow.

But speculation is mounting that restructuring firm Hilco will place the company into administration after buying £90m (€129.3m) of Allders debt last week, according to the Sunday Times.

Sources close to Hilco said today that no firm position had been taken, but a clearer picture could emerge on the future of the chain during the next few days.

Uncertainty over the future of Allders has grown since property group Minerva announced last month that it was seeking a buyer for the business.

Minerva has a 60% stake in investment group Scarlett Retail, which is the holding company of the 47-strong chain of Allders stores.

It is thought that a number of rival retailers, including Debenhams and House of Fraser, have expressed an interest in buying individual stores.

But the sales process was disrupted last week by news that brokers Lehman Brothers had sold its debt to Hilco.

Any decision to place the company into administration would heighten fears over the pensions savings of current and former Allders employees. Company accounts reveal the pensions fund has a deficit of around £15m (€21.6m).

Allders was bought two years ago for £158m (€227m) by Scarlett Retail, a consortium comprising Minerva, Lehman Brothers and its senior managers.

But it has found the challenge of reviving the business more difficult than expected and Minerva told investors that its share of Scarlett Retail had brought losses of £22.6m (€32.5m) last year.

Old stock was written off and prices cut by former Bhs boss Terry Green who took up the reins as chief executive of Allders following the takeover.

At the same time, store layouts were improved and around 40 new buyers and merchandisers have been recruited.

Mr Green told investors in September that the speed of these changes “has had an impact on the short-term profitability of the business”.

Allders employs 8,000 staff at its headquarters in Croydon and department stores at locations including Hull, Basingstoke, Leicester and Reading.