Home / Articles / 2,500 lose jobs as wholesaler P&H collapses

2,500 lose jobs as wholesaler P&H collapses


The wholesaler Palmer & Harvey (P&H) has entered administration after the failure of rescue talks, leaving 2,500 people out of work just weeks before Christmas.

Sky News had reported earlier on Tuesday how the company – Britain’s biggest tobacco supplier – was on the verge of collapse amid a funding crisis and fading hopes of a buyout by private equity firm Carlyle.

Joint administrators at the business services firm PwC said P&H employed 3,400 people but they had needed to make immediate redundancies at its head office and in the branch network of 14 regional distribution centres.
They confirmed just 450 people were currently being kept on to assist in managing the activities of the business to an orderly closure, adding that November’s salaries had been paid.
The demise of P&H, while devastating for workers, also risks disruption in supplies to UK stores and restaurants.

Image: Every Tesco store in the UK gets its tobacco supplies from P&H
It was the country’s largest delivered wholesaler to the convenience market with 90,000 customers in total, including the large supermarket chains.
Tobacco firm Imperial Brands – which had lent financial support to P&H – said that while it had contingency plans in place to mitigate supply problems it estimated a £160m hit to its own operating profits – mainly from unrecoverable excise duty.
It said: “P&H has been a long-standing trading partner in the UK and for several months Imperial has been working to find a solution that provides the business, and its employees, with a sustainable long-term future.
“Imperial was prepared to explore further alternatives but other parties have been unwilling to pursue these to a successful conclusion.”

Image: Palmer & Harvey had been supported financially by some of its customers ahead of its collapse. Pic: P&H
PwC explained: “The group has been by hit by challenging trading conditions in recent months and efforts to restructure the business have been unsuccessful.

“This has resulted in cash flow pressures and it has not been possible to secure additional funding to support the business.”
Joint administrator Matthew Callaghan added: “This is a devastating blow for everyone who has been involved in the business.
“The administration team will focus on working with employees, clients and suppliers to facilitate a smooth and effective wind-down or transfer of operations over the next few weeks.
“The P&H Group has faced a challenging trading environment, and the need for significant restructuring has been recognised for some while.
“The company has insufficient cash resources to continue to trade beyond the short term and the directors have concluded that there is no longer any reasonable prospect of a sale.
“Therefore, the directors have had no choice but appoint administrators.
“The administrators are working closely with employees affected by the closure of the business to ensure they receive the support they need during this difficult time to assist with their claims for redundancy and other compensatorypayments.
“Our priority is to ensure that all employees made redundant are assisted in processing their claims with immediate effect.”

Source: Sky

About Business Ideas UK

My name is Joel Bissitt. I have been an entrepreneur for 24 years and have run many small businesses across various sectors. For the last 10 years I have worked mainly within online media, franchising and small business start-ups. I am an author of various websites including Franchise UK https://www.franchise-uk.co.uk

Check Also

Qatar buys 24 Eurofighter Typhoon jets in £6bn deal

A £6bn deal to sell Eurofighter Typhoons to Qatar will help safeguard thousands of …

Free Franchise Guide

Free Franchising Guide

 

Interested in buying a franchise? The our FREE Franchise Guide is a must! The guide contains lots of information to help you decide if franchising is right for you.

 

To claim your Free Franchise Guide click here