Crisis talks are underway at Axminster carpets after the company today revealed plans to appoint administrators for the struggling East Devon firm.
The move, announced today in a company statement, leaves 400 jobs potentially at risk.
Bosses are discussing ways to find a buyer for the Devon family firm, which was granted a Royal warrant by the Queen last year, and also lost its bid to beat the economic downturn after trying to break into niche overseas markets.
Tim Jones, chairman of the heart of the South West Local Enterprise Partnership, said the “market cycle had gone against them” but added there was hope that a “white knight” might ride to the firm’s rescue.
He said the announcement, made to employees this morning, was an “enormous blow” to the town and the wider regional economy, where another 50 jobs are also at risk.
"This is earthquake territory in terms of the shock on the local area," he added.
A statement from the company, released at lunchtime today, reads: Axminster Carpets Limited continues to trade while the Company explore all potential rescue/restructuring options.
The Company's board of director confirm that a notice of intention to appoint administrators has been filed with respect to the Company. The notice was filed in order to provide the Company and its creditors with a moratorium period during which the various rescue options being explored can continue.
The notice of intention to appoint administrators nominates Benjamin Wiles, Geoff Bouchier and David Whitehouse of Duff & Phelps as Joint Administrators.
The Company's Director, Joshua Dutfield, commented: "Trading has been difficult and the management has been working with key suppliers, creditors and the lenders in an attempt to resolve the Company's financial difficulties. We continue to be committed to working to achieve the best possible outcome for all concerned and most importantly the staff and suppliers."
The company also has an outlet at Buckfast.
Councillor Andrew Moulding, Deputy Leader of East Devon District Council, and also Mayor of Axminster, has reacted to the devastating news by saying: "As an Axminster councillor I am terribly disappointed that a company that has taken the name of our historic town into thousands of homes and businesses all over the world should have succombed to the economic ills that beset so many companies during these difficult global trading conditions.
“As Mayor, I am aware of the effect this will have on Axminster as a town and a community, and the impact on the individuals and families who have been such loyal and long-standing employees of this family business. I also feel for the Dutfield family, who have been such good employers and are victims of a global recession.
“I am desperately sorry for the hard-working employees of the company, who now find their employment under threat. EDDC wants to see a thriving economy in East Devon and we will do anything we can do assist the company in these difficult times.
“Of course, we should not lose heart. The company is intending to appoint administrators and that means there is good reason to hope that it can be saved and continue trading, albeit in a different format, into the future. The next few days and weeks will be crucial and whilst I sympathise with the current plight of the employees and directors, I remain optimistic that something can be salvaged to ensure that this iconic name, so synonymous with quality and resilience, continues for many years to come”.