Disappointment as stores group goes into administration
THE East of England Co-operative says it is “very disappointed” after a retail business which took over its department and home stores last year went into administration.
Around a third of jobs at Vergo Retail Ltd are set to be axed and a number of stores across the region have been earmarked for closure as administrators try to find a buyer for the business.
The East of England Co-op clinched a deal with Vergo in July last year to take over its department and home stores business, while the society retained the freehold ownership of the buildings. Four of the stores were under threat of closure and at the time the deal was seen as a welcome reprieve for the staff and the outlets.
Around 350 Co-op employees were transferred to the stores, and Vergo was even given a year rent-free in the Co-op premises to support the deal.
But this week, joint administrators Sarah Bell and Steven Muncaster, partners at insolvency practitioners MCR, announced closing down sales of nine Vergo retail outlets, including stores at Witham, Clacton-on-Sea, Stowmarket, andovercourt, plus a jewellery store in Colchester.
It also announced the loss of 335 jobs across the business with immediate effect. The nine stores were deemed to be loss making and were expected to close within the next four weeks, but a purchaser for these stores would not be ruled out until they finally stop trading, it said.
Ten stores, including at Ipswich, Norwich, Great Yarmouth, Felixstowe, Stanway, Colchester and Clacton, continue to trade as usual while a buyer is sought.
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East of England Co-op chief executive Richard Samson said: “Vergo currently lease a number of premises in East Anglia from the society and we have given considerable help to them, including allowing their first year in our premises to be rent-free.”