Ipswich: Uncertainty for ModelZone staff following appointment of administrators
PUBLISHED: 17:34 27 June 2013 | UPDATED: 17:34 27 June 2013
Toy and model retail chain ModelZone has collapsed into administration, potentially affecting around 400 workers.
ModelZone, which has 47 stores across the UK including a branch in Ipswich, and its wholesaling arm Amerang have appointed Deloitte as administrator after losing out to online competitors and suffering hefty losses on onerous shop leases.
Deloitte said Modelzone gift vouchers would continue to be honoured but only towards 50% of the purchase price.
Deloitte said it was seeking to “preserve jobs” at ModelZone, which has its headquarters in Lancing, West Sussex, and secure a sale of the business as a going concern.
ModelZone founder David Mordecai, who is chief executive of Hawkin’s Bazaar parent Tobar Group, based in Norwich, is reportedly preparing to launch a rescue bid for the chain.
He launched the business in 1987 after he bought Brighton-based Model Aerodrome, rebranding it ModelZone as he expanded the chain.
Richard Hawes, joint administrator and partner in Deloitte’s restructuring services practice, said: “ModelZone has historically been profitable, however in recent years the company entered into leases for new stores that proved to be loss making.
“This, coupled with the growth in online competition, has resulted in ModelZone generating losses over the last couple of years, which the board of directors has now concluded is unsustainable and sought the appointment of administrators.”
Its wholesaling business, Amerang, is profitable, but sought the protection of administration following the collapse of its sister company ModelZone, according to Deloitte.