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20 NE jobs lost as administrators confirm Modelzone closure
ADMINISTRATORS for collapsed toy train and model retailer Modelzone have announced that all remaining stores will close, with the loss of 126 jobs.
Deloitte said it received no offers for the business on a going concern basis and the remaining 18 stores will close in the middle of September.
It will see the closure of Modelzone shops in Newcastle and the MetroCentre, which employ seven and eight staff respectively, as well as the Harrogate branch, which has five employees.
Modelzone, which employed 400 staff across 47 stores UK its wholesale arm Amerang, ran into trouble earlier this year after trying to expand rapidly.
It's understood that the collapse means lenders and suppliers, including model train maker Hornby and Lloyds Bank, face losing about £7m in unpaid debts.
Richard Hawes, joint administrator and partner in Deloitte’s restructuring services practice, said: “We sought to find a potential buyer for some or all of the stores, but unfortunately no viable offers have come in since our appointment two months ago.
"Modelzone has been generating losses over the past few years, largely through an increase in online competition and having taken leases on new stores that proved to be unprofitable.
“Once again, we would like to thank the company’s employees for their support and professionalism during this time.”
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