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Bertrams escapes as Woolies falls
27.11.08 | Graeme Neill
Bertram/THE has been unaffected by parent company Woolworths Group plc's decision to place wholesaler Entertainment UK (EUK) and its retail wing into administration, The Bookseller understands.
The boards of EUK and Woolworths Retail met on Wednesday night (26th November) with both businesses falling under the control of administrators Deloitte. A spokesperson for the group told The Bookseller: "The board of Woolworths Retail and Entertainment UK have decided to take the necessary steps to go into administration.”
However, the Bertram Group is understood to be unaffected by Wednesday's move and will continue trading as normal. The Bookseller's understanding is that Bertram's finances are run separately to those of EUK and hence it remains unaffected. The situation is expected to be clarified later today. A joint venture with the BBC called 2Entertain, that sells DVDs such as Blue Planet, has also not gone into administration.
It remains unclear whether EUK will supply books to its retail customers, Sainsbury's, Tesco, Woolworths' shops and Zavvi, under administration.
A statement sent out by the administrator Deloitte stated that Neville Kahn, Nick Dargan and Dan Butters had been appointed Joint Administrators to Woolworths plc, the high street retailer, and Entertainment UK Ltd, the wholesale division.
Deloitte said that it had appointed Hilco to assist in the management of the retail business, and planned to look for a "suitable buyer for all parts of the business". Butters, reorganisation services partner at Deloitte, added:"In the last 24 hours we have received expressions of interest from a number of parties for both the retail and wholesale businesses. We are working hard to ensure that any sale of the business, in whole or part, will preserve jobs.”
The statement confirmed reports that stores would remain open past Christmas and employees in stores would be paid. Kahn, reorganisation services partner at Deloitte, added: "Woolworths has suffered a number of cash flow problems. Strenuous efforts over recent weeks to keep these companies going have unfortunately failed and the businesses are now looking to be rescued under the administration process."
EUK bought the Bertram Group for £29m in January 2007 and merged it with wholesaler THE. One option open to the administrators is for EUK to continue trading during the administration process. This occurred when discount chain The Works went into administration earlier this year.
Woolworths Group had been looking for a buyer for its retail business in a bid to stave off administration. On Wednesday morning, the group had requested a suspension of the trading of its shares on the London Stock Exchange.