800 face jobs risk at Au Naturale stores

GLASGOW-BASED homeware chain Au Naturale fell into the hands of administrators last night after months of financial turmoil, putting almost 800 jobs at risk.

The operation's remaining 59 stores, of which the majority are in Scotland, are now under the control of PricewaterhouseCoopers.

A total of 22 redundancies were made yesterday at the company's head office in Glasgow, but the administrators last night promised that no further job cuts were planned immediately.

Around 30 of the chain's stores, mainly those in the north of England, were sold to Cheshire-based Opus Estates last month, while the firm's sister company – fashion chain Internacionale – was sold off in its entirety to an overseas retailer last week.

A total of 1,350 jobs have been saved at the two chains – while the future of almost 800 workers remains uncertain – 77 at the head office and around 725 in the remaining Au Naturale stores.

PricewaterhouseCoopers said last night that Graham Martin, Ian Green and Jeremy Webb had been appointed as joint administrators of Internacionale, the parent company of both brands.

Internacionale, in turn, is owned by Ossian Retail Group, which is now believed to be a shell company.

Martin said the company had suffered financial difficulties for the past nine months.

He added: "The problems were caused partly by the downturn in the retail markets and partly by internal problems – mainly operational difficulties in the supply of stock from its warehouses to the retail outlets.

"We have made some redundancies at head office, but we plan to continue trading the 59 stores with the existing staff. We have told employees they will be paid at the end of the month as usual."

He said: "We will continue to trade the remaining stores while we fully assess the options available."

Ossian Retail Group chief executive David Brock is to remain at the company in the immediate future, along with other Ossian board directors.

He could not be reached for comment last night.

A meeting of stock suppliers last week agreed a 25p in the £1 offer, which will see them paid back just a quarter of the cash owed to them. Martin added: "If the company had gone into administration seven or eight weeks ago, the creditors would not have got any of their money back. As it is, they got some of their money back."

Brock last week told The Scotsman that the company's woes worsened after its banks, Barclays and Bank of Ireland, refused further funding when the company first encountered financial difficulties.

It is understood that Internacionale will tomorrow announce a name change to avoid any confusion with the 105 Internacionale stores in the UK which are to continue trading under new ownership.

Martin said: "The new owner has its own distribution network and so on but will continue to use some of the Internacionale suppliers and will trade under the same name."

London-based investment fund Agilo, which invests in troubled enterprises, bought up most of the remainder of Ossian's debt last month.