Restructuring the business
While it was a difficult decision to come to, Aulds have made statement that they have taken a decision to save its manufacturing subsidiaries – Aulds Bakeries and Aulds Delicious Desserts. In order to make this work, however, they are being forced to close all 26 of their Thomas Auld & Sons stores.
Aulds Bakeries produces fresh and frozen bakery goods at their site in Greenock, while the Inchinnan facility provides goods for the foodservice market. The Aulds Delicious Desserts arm has grown by 8% annually over the last three years.
They said that the retail arm of the business had been pushed into an unsustainable loss-making position, after pressure from high street and supermarket rivals combined with the increasing costs of distribution, wages, and ingredients.
The stores, which are based in Scotland, will continue to stay open and trade. The liquidators are aiming to sell as many as possible as a going concern, with the aim of saving as many food jobs there as possible. There are around 180 people currently employed across all of the stores.
The product range from their Aulds bakery will continue to be sold in Scotmid stores without interruption, as well as being carried by other independent outlets across Scotland.
A difficult choice
Alan Marr is the current Managing Director. He’s a fourth-generation descendent of Thomas Auld, who launched the first bakery in 1900 and formed the business. He said that this action was the only way the family could protect and save the rest of the business.
“We have invested considerable time and effort over a period of several months looking at alternative courses of action that would allow us to avoid the voluntary insolvency of our retail business,” he said. “Unfortunately, the losses in our retail business are such that the rest of the group is no longer able to sustain it. We sincerely regret that a significant number of our colleagues will be affected by these circumstances, and we’ll be working closely with local job centres and other services to help people into new jobs if necessary. The other parts of our business will continue to operate, and people who enjoy our products will still be able to buy them from their usual Scotmid and other local convenience stores.”
It will certainly be a relief to 200 of their current production and manufacturing workers that their jobs are safe, but not so for the others who have discovered that their jobs may now be at risk. They will all have their fingers crossed that a buyer is found who wishes to keep the current staff on, and soon. The hope is that all of the stores can be sold in a bundle and therefore kept together easily, but that may not end up being the case. Some could be sold for conversion into other types of business.
Paul Dounis has been appointed joint liquidator of the retail arm, along with Steve Ross, both from RSM Restructuring Advisory. Dounis said, “Despite exploring possible options to rescue the business, the management team has taken the difficult decision to place the retail arm of the group into liquidation. The ongoing pressure facing the high street has been well documented, with high-profile names entering distressed situations – and unfortunately, this difficult trading environment has led to another blow for the high street.”