Paperlinx UK has gone into administration overnight, laying off hundreds of staff as administrator Deloitte shuts down most of its UK operation. Some 14 sites will close and almost 700 of the 1200 staff have already gone, with most of the sales offices closing immediately. Five sites will remain open in an effort to realise the value of stock and assets.
Andy Preece CEO of Paperlinx
The UK situation does not affect Australia directly as the company is run as a stand -alone entity. Andy Preece, the new CEO at Paperlinx says, “The profitable Spicers businesses in Australia, New Zealand and Asia are insulated from the financial liabilities of the UK businesses.” Paper sales have been tracking downwards in the UK since the GFC as the print industry contracts, with Paperlinx as the biggest merchant affected the most. The administrators at the troubled paper merchant made 693 of its 1200 staff redundant, with staff told to clear their desks and leave the offices by 4pm local time Paperlinx head office in Northampton will make 188 of the 411staff redundant. “It was awful, people were told to go to either the staff restaurant, or a conference room depending on whether they were being made redundant or staying on,” said one employee to Printweek magazine. The UK packaging businesses – Parkside Packaging, 1st Class Packaging and Donington Packaging Supplies – are not included in the administration. Matt Smith and Neville Kahn of Deloitte have been appointed joint administrators of a number of Paperlinx UK businesses, including Robert Horne Group, Howard Smith Paper Group, The Paper Company, and Paperlinx Services (Europe). “The administration appointment specifically relates to Paperlinx UK’s paper and visual technology solutions businesses. The industry has faced an increasingly challenging environment due to falling demand as digital communications have increased. We are investigating how best to maximise value in the businesses for the benefit its creditors,” Smith says in a statement. “The joint administrators are seeking to continue to trade the businesses on a limited basis to secure the best value available from current stock holdings and other assets. Many of the sales office locations are being closed today. “The businesses will continue to actively trade from five sites, including the Northampton head office, but on a more limited basis than previously. During this period we will also be attempting to find a purchaser for all or parts of the businesses. Paperlinx is fighting fires on several fronts, it currently has its shares in a trading halt pending enquiries into a potential banking breach in Europe, it has a new CEO, former Spicers boss Andy Preece, who was promoted last week to succeed Andrew Price, who came to power after a turbulent two year battle to sack the board.
Comment below to have your say on this story.
If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.
Sign up to the Sprinter newsletter
