The family-owned business said the closure of all of its 26 Thomas Auld & Sons stores would ensure the brand’s survival through its two manufacturing subsidiaries – Aulds Bakeries and Aulds Delicious Desserts.
Pressure from high street and supermarket competition, as well as increasing ingredient, distribution and wage costs, had taken the retail business into an unsustainable loss-making position, the company said.
All of its stores across Scotland will continue to trade, and the liquidators intend to sell all or some of them as a going concern to save as many jobs as possible. The company employs around 180 people across its stores.
Aulds’ bakery products will still be available as normal in 50 Scotmid stores throughout Scotland, as well as from other independent outlets where currently sold.
Protecting the rest of the business
Managing director Alan Marr, a fourth-generation descendent of founder Thomas Auld, who opened his first bakery store in 1900, said the action was the only way to protect 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 explained.
“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.”
Marr said he was “absolutely committed” to a successful future for the business. “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,” he added.
Joint liquidator appointment
Paul Dounis and Steve Ross of RSM Restructuring Advisory were yesterday (2 August) appointed joint liquidators of the retail arm of the group.
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.”
Aulds reported a loss of £430,000 on turnover of £15.4m for the group in the year to 1 April 2017. Turnover increased from £15.2m the previous year.
Aulds Bakeries produces fresh and frozen bakery at the firm’s Greenock site. Aulds Delicious Desserts, which has grown 8% annually over the last three years, serves the foodservice market from a manufacturing facility in Inchinnan.