Town loses two stores

10:37am Friday 9th May 2008

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TWO home-ware shops in Kendal have fallen victim to the country's economic woes.

The Fabric Warehouse, on the South Lakeland Retail Park, has already closed and Au Naturale, in the Westmorland Shopping Centre, will cease trading at the end of the month.

Both stores are being axed because their parent companies ran into cash-flow problems, leaving them struggling to pay rent and suppliers.

Au Naturale, owned by the Glasgow-based Ossian Retail Group, which included the Internacionale fashion chain, employs eight people in Kendal. It is understood they have been told the branch will close on May 31 and that all staff will be made redundant. Meanwhile, the store is trying to empty its shelves with a half price sale.

Ossian had suffered months of financial turmoil, which resulted in the sale of Internacionale last month and the calling in of administrators PricewaterhouseCoopers on Wednesday.

Company documents said it had been "severely affected by the general retail downturn".

Administrator Graham Martin said the company had suffered financial difficulties for the past nine months.

He added: "The problems were caused partly by the downturn in the retail markets and partly by internal problems - mainly operational difficulties in the supply of stock from its warehouses to the retail outlets."

Before Ossian went into administration, it was reported directors had approached its landlords to ask if it could reorganise rent arrangements rather to ease cash-flow problems and that the company had persuaded suppliers of stock to Au Naturale to accept a 25p in the £1 offer to settle outstanding accounts.

Meanwhile, administrators at The Fabric Warehouse, which supplies fabrics and ready-made curtains, say just ten of the firm's 31 stores have been saved after being bought by Caldeira Retail Limited.

However, the Kendal branch is not one of them.

Administrator Neil Bennett, of Leonard Curtis, said the company, based in Rotherham, South Yorkshire, which last year turned over around £25 million, began suffering trading problems during 2007, a situation directors blamed on "consecutive interest rate rises and a challenging retail environment".

Mr Bennett said: "Caldeira is also taking over the responsibility for completing customer orders in 21 stores. In addition, we will be working alongside the management of The Fabric Warehouse to complete the remaining customer orders in the remaining stores where deposits have been paid.

"This is important because it means that customers who have paid deposits will not lose out."