Around 1,600 jobs are at risk after The Works, the bargain bookseller, fell into administration and became the latest high street victim of the credit crunch.
Kroll, the restructuring firm, was appointed yesterday afternoon after HSBC, the retail chain’s banker, decided to pull the plug. The Works has debts of more than £20 million.
The collapse comes a month after Tim Brookes, the chairman of The Works, said that he was “horribly pessimistic” about the prospects for the high street in 2008.
Kroll is working on a rescue package and hopes that a buyer can be found.
The Works is the UK’s biggest bargain bookseller with 317 stores across the UK.
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It is thought that the retailer suffered from intense competition in the run-up to Christmas as Waterstone’s and WH Smith battled it out for customers.
Peter Saville, partner at Kroll, said: “Despite today’s announcement I would like to reassure customers that it is business as usual for the stores.
“The trading environment for all retailers is particularly tough at present but we are continuing to trade the business as a going concern. These stores have a strong brand identity and are predominantly situated in excellent retail locations.”
Hermes Private Equity funded a £50 million management buyout at The Works three years ago. Derek Hine, the chief executive, and Andrew Walker-Smith, the retail operations director, left last summer.
Dolcis, the shoe store chain, and Ponden Mill, the homewares retailer, have both collapsed into administration in the past two months.