Tuesday, 15 January 2013

Ethel Austin Morecambe closes as chain collapses

Ethel Austins Morecambe closed on Friday, with staff given just half an hour to clear their personal belongings before the shop was closed for good - the final nail in the coffin for the troubled clothing chain whose Lancaster store closed last year.

Owner Ricli Limited called in administrators and its stores, numbering around 30 nationally, were closed. The Liverpool Echo reports around 200 people are expected to lose their jobs.

Salford-based entrepreneur Mike Basso, who "rescued" the chain from administration last year, said he had been unable to keep the business afloat, claiming the company had been forced to act to protect creditors and that his involvement with the business had been “very painful”.

A security firm closed the stores leaving remaining staff little time to gather belongings before the doors were closed for a final time.

Ethel Austin had been in administration five times in four years, with each wind up and resuting in further store closures. Despite Ricli's intervention last year, stock levels at remaining stores continued to fluctuate and some stores had not had deliveries for months.

When Ricli's purchase of the remaining stores, including Morecambe, was announced last year,  trade union Usdaw has expressed “some concern” over the fact that Mr Basso was “closely involved with the business [as an investor] under previous recent owners”.

The rescue by Mr Basso also represented a U-turn after he told the Echo, a month before concluding his buy-out, that his involvement in the company would be “no more” after losing significant sums of money to previous owners.

After buying the firm, he told the Echo: “In the right hands, Ethel Austin is a very good brand" and was publicly critical of Ethel Austin’s former management, arguing before he rescued the business that it could “prosper” if it were “run properly”.

The business was founded by Ethel Austin and her husband George in a Liverpool council house in 1934. Before the series of administrations which began in 2008, the company had 300 stores employing almost 3,000 staff.

Ethel Austin was being run by award-winning business woman Sue Townsend's Ashloch Ltd when it failed last year and the Lancaster store subsequently closed. Ashloch acquired the assets of the chain’s previous owner, Life & Style, which the Liverpool Echo notes was run by Mr Basso’s friend, Elaine McPherson, when that company collapsed in the summer of 2010.

This article on Soult's Retail View details the problems facing Ethel Austin after Michael Basso's purchase of the company last year

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