By HELEN COMPSON

Last updated at 10:58, Friday, 14 May 2010

HEXHAM’S iconic department store Robb’s is set to close with the loss of 129 jobs after administrators were called in.

For the second time in three years, owner David Thompson has taken the store and its parent company into administration. But this time round, there is little hope Robb’s will be sold as a going concern.

Retail insolvency specialists MCR set a deadline of 5.30pm last night – just four working days after the firm was called in – for potential buyers to register an interest.

If there are no potential bidders, banners advertising a closing down sale were due to go up in store windows this morning.

One man said after an impromptu meeting, held for staff on Wednesday morning: “Basically, none of the stock will be replaced and the store will remain open for as long as it takes to sell off what’s here.

“They are saying four weeks at the outside – we think it will probably be a fortnight.”

Staff are shell-shocked at the rapid demise of the institution which has graced Hexham for the past 192 years.

Many of them were called into the manager’s office on Tuesday afternoon and handed their redundancy notices.

A source said it had come like a bolt out of the blue for some. “It was terrible – they really didn’t know what was coming.”

However, there had been a growing awareness among the concession holders that there was a financial crisis.

Several of them had contacted the Courant during the past month to say they were owed thousands of pounds in takings.

One business hadn’t been paid since the turn of the year and was owed £30,000.

Another self-employed operator was owed £14,000 and had put in £5,000 of his own money to keep his business going. Several more were owed between £8,000 and £12,000.

This week, some parts of the store looked like a crime scene, where concession holders had cordoned off their departments with plastic barrier tape. Shelves and rails were being emptied, and boxes packed with stock.

David Thompson, managing director of Robb’s parent group Vergo Retail, said he, too, was shell-shocked.

He blamed the demise of his company on the failure to agree a new funding package with backers.

Financial restructuring became a necessity following an earlier decision to close his flagship store, Lewis’s in Liverpool, because the building he rented was at the heart of a multi-million pound, three-year long redevelopment programme.

Around 100 Lewis’s staff issued with their redundancy notices in February fear Vergo’s collapse means they will now receive statutory redundancy pay only.

The Robb’s staff are among another 335 members of staff across another nine Vergo stores that have now been earmarked for early closure by the administrators.

MCR partner Sarah Bell said this week: “Following a financial review of the business, it was apparent it could not continue to trade in the short term without implementing immediate cost saving measures.”

Robb’s sister store in Sunderland, Joplings, is one of the nine.

David Thompson’s previous company, Owen Owen, bought Robb’s and Jopling’s for £8 million in 2005.

A year later he sold off the Robb’s building on Fore Street to Scottish property empire Buccleuch Group for £7.7 million. He said the bulk of that money had gone to the VAT man and creditors.

In 2007, Owen and Owen went into administration, but Mr Thompson immediately formed Vergo Retail and bought back the Robb’s, Jopling’s and Lewis’s businesses, leaving creditors substantially out of pocket.

When he was asked this week whether he planned to do the same again, he avoided a direct answer. He was concentrating on Vergo Retail at the minute, he said.

Questions were being asked this week whether Vergo’s aggressive expansion drive during 2009 had brought the business down.

In March, the company bought Plymouth department store Derry’s and four Homemaker stores in Devon and Cornwall, and then four months later, 12 former Co-operative stores in East Anglia. By the end of last summer, Vergo employed over 1,000 people in 20 stores nationwide.

During one call with the Courant, Mr Thompson admitted the bloated nature of the old Co-op businesses – in particular a serious level of over-staffing – had proved a nasty sting in the tail.

The Buccleuch Group owns the Robb’s building, and rented it out to Vergo. Commercial property director Nick Waugh said the group had not been given any advance notice about Vergo’s situation.

He said on Tuesday: “We were approached out of the blue by the administrators – we didn’t know Vergo was going into administration.

“We are investigating every option, but we have to do that through the administrators, so it would be premature to comment on those discussions.

“We have the future of the store in Hexham at the forefront of our minds – we want to achieve some stability, which it hasn’t had for some time.”

Robb’s plight is a far cry from the bright hopes for Hexham’s high street floated just 18 months ago.

In May 2008, Buccleuch announced plans for a £40 million redevelopment that would replace the faded Robb’s building with a brand new retail and office complex.

But just months later, those plans were put on ice as the economic downturn began to bite.

First published at 09:48, Friday, 14 May 2010
Published by http://www.hexhamcourant.co.uk

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