ModelZone enters administration
Toy and model retailer ModelZone has entered administration, putting 400 jobs at risk.
The company has appointed business advisory firm Deloitte as administrators to ModelZone and its Amerang subsidiary. The administrators are now seeking a buyer for the businesses.
Founded 26 years ago, ModelZone is the UK’s largest specialist model chain. With headquarters in Lancing in West Sussex, the company operates 47 leasehold retail stores and online. Although historically profitable, the company has faced online competition in recent years and has also suffered losses from leases taken on new stores.
Amerang, the group’s toy and hobby trade products wholesaler, operates from an 80,000 sq ft warehouse.
Joint administrator Richard Hawes said:“ModelZone has historically been profitable, however in recent years the company entered into leases for new stores that proved to be loss making. This, coupled with the growth in online competition, has resulted in ModelZone generating losses over the last couple of years, which the Board of Directors has now concluded is unsustainable and sought the appointment of administrators.
“We are working closely with customers and employees to ensure the business has the best possible platform to secure a sale, preserve jobs and generate as much value as possible for all creditors.
“Amerang is a profitable business, but the directors were forced to seek the appointment of administrators to protect the value of the business following the administration of Modelzone, its sister company. Amerang remains profitable and we will continue to trade as normal while we seek a buyer for all or parts of the business as a going concern.”
The administrators also confirmed that gift vouchers will be honoured towards 50% of the purchase of goods.
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