Ethel Austin: Firm's 3,700 jobs threatened
Budget clothing retailer Ethel Austin and homewares chain Au Naturale have gone into admistration putting 3,700 jobs at risk.
Administrators have been appointed for both companies, which have 25 stores in Scotland and 276 in total across the UK.
This is the second time in two years that Ethel Austin has called in the administrators.
The sister companies will continue to trade while a new buyer is sought although administrators have not ruled out redundancies and the closure of the stores.
Union chiefs said the announcement is a blow for staff and said they are working to secure jobs.
Administrators MCR blamed poor trading conditions since January and severe weather conditions for a slump in sales.
Ethel Austin was first bought out of administration in 2008 by former MK One boss Elaine McPherson.
Geoff Bouchier, of MCR, said: "The joint administrators are trading the companies in administration in the short term with a view to finding a purchaser for the businesses as a going concern.
"In the current economic climate there are no guarantees that purchasers will be found. We are reviewing the financial position of the companies and are at this stage, unable to rule out store closures and redundancies."
He added: There is no doubt in our mind that the onset of the global economic crisis has hit the retail sector particularly hard. As a consequence of this the companies have struggled to secure funders, which in turn has impacted their ability to generate sales revenue.
"This has been compounded by poor trading conditions in January attributed to the adverse weather conditions, which severely restricted the Companies' cash flow. The Companies have continued to seek additional finance up until very recently but without success".
John Gorle, Usdaw national officer, said the announcement was "terrible news" for staff.
He said: "The announcement that Ethel Austin has again gone into administration isn't a complete surprise as we were aware that the company had some financial difficulties.
"We have already made contact with the company and the administrators with a view to working closely with them in an attempt to secure the employment of all staff.
"Today's announcement is terrible news for the loyal and hardworking staff who now face a period of uncertainty surrounding their future."
