THE future of Kendal’s £100 million K Village shopping complex has been plunged into doubt after its owners went into administration.

Kendal Riverside Ltd referred itself to administrators KPMG on December 28 - but this week both insisted it was ‘business as usual’ for the centre.

Bosses hailed the development, built on the site of the former K Shoes factory, the ‘focal point for the regeneration of Kendal’ at a fanfare launch in July 2010.

But they struggled to attract retailers to fill units in the troubled venue with a string of businesses pulling out citing poor sales.

Of the 90 apartments built as part of the scheme, it is believed as few as two have been sold.

The centre’s ‘pay-on-exit’ parking system has also been criticised, but one trader said footfall had increased since charges were reduced.

Joint administrator John Hansen told the Gazette he had established how much creditors were owed but was keeping tight-lipped over the figure.

But he revealed that he had not engaged with a potential buyer, nor had the centre been put on the market.

“We are gathering a lot of information from the company’s records and directors to get ourselves up to speed,” said Mr Hansen.

“We we will be communicating with stakeholders, creditors and suppliers to come up with a plan for going forward and a strategy that’s agreed by the bank.”

He went on: “Liquidation is not on our radar at the moment. It’s very hard to crystal ball something like this but, at this point, it’s our intention to keep it open as a shopping centre for the foreseeable future.”

Restaurant Moe’s Grill, beauty specialist All Whellan Good, chocolate maker Cadbury, women’s clothing retailer Alexon and health food shop Juilan Graves have left the centre since its launch.

Outdoor chain Mountain Warehouse has confirmed it is leaving.

Just a handful of shoppers were seen browsing the centre this week, when shops still trading were: Clarks, Double Two, Denby, Lakeland, Domo, Cotton Traders, Pavers Shoes, Procook, Costa, Whittard of Chelsea, The Works, Bedeck, Trespass and Klass.

Double Two chairman Richard Donner described the store’s performance as ‘an absolute disaster’ - the worst of its 70 nationwide shops.

He said: “It (K Village) was really good before, with hundreds of coaches every month and lots of people in shops.

“Then they rebuilt it with a layer of houses and an enormous car park which looks like a liner.

“We’ve two years left on our lease and, if it doesn’t improve, we’ll be leaving at the end of that time with great joy.”

But Lakeland retail director Sue Hext was more optimistic. She said: “We traded very well over Christmas. Since they reduced car parking fees, we’ve noticed an increase in footfall.”

South Lakeland District Council leader Peter Thornton said it was a ‘tribute’ to Kendal Riverside that they managed to deliver K Village at a time when other construction projects were being left half-built.

He described K Village as a ‘bold concept’ which had been ‘caught out by the economy’.

Westmorland and Lonsdale MP Tim Farron said the venue needed an ‘anchor store’ like Debenhams or Primark to entice shoppers.

“Shops in K Village are doing a great job, it’s not their fault that the holdings company has gone to the wall and the number one priority is keeping people in their jobs,” said Mr Farron.

He said only ‘one or two’ apartments at the complex had been sold and called for a housing association to take them on.

Meanwhile, a political row has broken out over £100,000 owed from the K Village development.

Kendal Riverside is due to pay the sum to South Lakeland District Council in order to fulfil a planning condition to provide funding for projects in Kendal.

Opposition councillors accused SLDC of taking a ‘casino-style bet’ by giving the company a £100,000 ‘loan’ out of public funds which it may not now get back.

SLDC shadow spokesman Coun Ben Berry said: “This is a dire situation. We have jobs and businesses on the line and, due to a casino style bet on the firm, SLDC is set to lose £100,000 that it simply cannot do without.”

But Coun Thornton hit back: “It is wrong to say we have given them a loan. It’s money that we wouldn’t have received had K Village not gone up.

“It is not money the council has lost, it’s simply £100,000 to be paid to us. All of the creditors could lose out, and the council is one of the creditors.”

Coun Thornton said Kendal Riverside had given about £350,000 to the council to fund a series of improvements in Kendal, including the Kirkland regeneration scheme.

He confirmed that a further £100,000 – allocated by the council for the town’s Highgate development – was still outstanding.

After news of K Village's troubles emerged, SLDC issued a statement listing the benefits it said had been brought to Kendal as a result of financial contributions from Kendal Riverside, including ‘pay-on-exit’ parking at the Westmorland Shopping Centre and 40 new homes in Lound Place. 

K Village was one of just two retail complexes to open in the UK in 2010.

The aim was to create 300 jobs and attract 1.5 million visitors and 4,000 coaches a year.

Kendal Riverside employs three people.