One of the UK’s most well-respected wholesaler’s Palmer and Harvey (P&H) confirmed that they were going into administration. Following failed rescue talks, the firm had been having ongoing takeover talks with private equity company, Carlyle. However, no result could be established.
Administrators PwC have explained that approximately 2,500 jobs will be axed right away. The media have paid close attention to P&H’s situation, a large public interest has grown due to the potential loss of thousands of jobs right before Christmas.
It has been widely reported that P&H had been struggling to re-pay debts and key suppliers for long periods of time and it had reached a point where that couldn’t continue any longer.
P&H are the UK’s largest delivered wholesaler to the convenience market with 90,000 customers including national supermarket chains. Popular local stores, such as Costcutter have been heavily affected by this week’s news due to their long-standing partnership with Palmer & Harvey. A Costcutter spokesperson explained that "We have activated our contingency plans to provide alternative sources of supply through appropriate regional and national options."
Some interesting facts you may not have known about P&H:
UK's largest tobacco supplier
Fifth biggest privately-owned firm in the UK
Distributes more than 12,000 products, including food and drink
The company is 92 years old
The company is reportedly going to retain around 900 staff, and the remaining 2,500 will be made redundant immediately. The administrators are said to be exploring the option to sell several P&H companies separately including P&H Direct Van Sales Ltd, P&H Sweetdirect Ltd and P&H Snacksdirect Ltd.
The job cuts will affect their head office operations located from East Sussex and its branch network, which includes 14 UK distribution centres.
“The Palmer & Harvey name has been a trusted partner for retailers and suppliers for nearly 100 years”, said Matthew Callaghan, joint administrator at PwC. “This is a devastating blow for everyone who has been involved in the business.”
The Competition and Markets Authority dismissed early November concerns regarding Tesco’s takeover in its early stage findings. The fall down of P&H could mean that both Booker and Tesco will become more dominant in the wholesale sector once their deal is cleared.
Increasing inflation rates were also a big factor for P&H. The company faced increased pressures from changes to legislation, mainly down to their tobacco and cigarette sector operations. Amazingly, the firm only achieved profits of £618,000 from revenues of £2.5bn.