Jobs At Risk At Stylish Store; Shop Goes Into Administration After Less Than Two Years

Evening Chronicle (Newcastle, England), June 26, 2008

Byline: By GARETH DEIGHAN and SARA NICHOL

SCORES of North East jobs are at risk after Scandinavian furniture store Ilva went into administration less than two years after opening.

Ilva's shop, based at the former Marks and Spencer's Lifestore next to Gateshead's MetroCentre, employs around a quarter of the business' 400-strong UK workforce.

Staff were told the company's Icelandic owner Lagerinn planned to pull out of the UK market and restructuring firm Kroll had been appointed as administrator.

Today, a small sign in the window of the 120,000sqft shop informed Tyneside shoppers the business had gone into administration but was still trading.

Richard Slack, principal lecturer in accounting and finance at Newcastle Business School, Northumbria University, said the retail industry's problems as a whole may mean it is difficult to find a buyer for the store - which would mean the jobs are at real risk.

He said: "At the moment retail is finding it difficult as people are facing higher food bills, fuel prices and higher mortgage bills and they don't have the money they would have had in the past.

"If this was in normal times, then it wouldn't be difficult to find a buyer as the reason the company went into administration would have been attributable to something, whether that be a problem in supplier or management, or whatever, and something could be done about that.

"But this is a problem with the general economy and that is more difficult. It is a very tough marketplace at the moment and most companies like this are finding it difficult.

Even if you can pick the company up cheap, you will still be in the same market."

Customers too, are worried about what will happen to the people working in store.

Regular customer Joanne Farrier, 38, of Walkerville, Newcastle, told the Chronicle she thought it was a shame the stylish retailer could be going.

She said: "A lot of businesses seem to be struggling at the moment and the credit crunch is definitely not helping matters. It's a really nice shop and it gave you more choice than just what was in Ikea. They sell some quite unusual stuff and it's nice having more than just Ikea to chose from."

Another shopper Karen Mathieson, of Burnopfield, County Durham, also voiced her disappointment at the closure. She said: "From walking around the shop just now, you wouldn't notice from the atmosphere that they had gone into administration.

I have used Ilva a lot and I think it will be a big miss.

"It offers style and quality and there is a wider range of designs than in Ikea.

Ilva has only been here a short time since Marks and Spencer left. The plot of land seems a bit doomed."

Adminis-trator Peter Saville reassured customers that all orders would be honoured and blamed tough trading conditions for the company's demise. He said: "The trading environment for all retailers is particularly tough at present but we are continuing to trade the business as a going concern. These stores have a strong brand identity and are situated in excellent retail locations. Although the retail sector as a whole is facing challenges at present, there are still many opportunities to succeed."

When Ilva opened it took on 350 workers, but numbers have dropped to around 100. The Gateshead store is continuing to trade until a buyer is found. The company has stores in Thurrock, Manchester and head office and internet operation in Reading.

Days ago North East furniture store SCS announced it was suspending shares after a buyer found the company's worth "negligible."

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LOOKING FOR A BUYER: ILVA Furniture Store in Gateshead