Business News
Fifty jobs to go at clothing company
FIFTY people are expected to be
made redundant after a North-
East clothing company announced
it is to close its headquarters.
Sandcity is shutting its offices
and distribution centre in Washington,
Wearside, after a review
by parent company Blacks
Leisure into how to revive the fortunes
of the loss-making business.
It will be merged with another
of Blacks' brands,
Freespirit, in Northampton.
Employees at the site yesterday
told The Northern Echo they
were devastated by the announcement,
which came weeks
after Sandcity managing director
Darren Spurling was suspended
in connection with the discovery
of a discrepancy in the company's
accounts.
A spokeswoman for Blacks - in
which Newcastle United Football
Club owner Mike Ashley has a 29
per cent stake - yesterday confirmed
the inquiry was continuing
and that Mr Spurling remained
suspended.
It is thought the discrepancy in
the finances of Sandcity - the
sole distributor in the UK of the
O'Neill surf clothing brand - relates
to allegations the company
had overstated its performance
by about £2m in total over the
past two financial years.
Neil Gillis, chief executive of
Blacks Leisure, said the job losses
and closure of the Washington
base were regrettable, but the
move was necessary to stabilise
the business.
All 50 employees at the site
were yesterday told of the company's
plans.
It is expected the merger will
be completed by next month.
Sandcity's base on Washington's
Stephenson Industrial Estate
will also be put up for sale in
the coming weeks.
The move will see the creation
of 14 jobs in Northampton, some
of which would be offered to people
made redundant in Washington,
said Sandcity.
Mr Gillis said: "Our recovery
plan for the group identified that
reducing the cost base and improving
operational efficiencies
were key to the future of the business.
"The decision to merge the
Sandcity and Freespirit operations
will eliminate duplication
of functions within the boardwear
business and deliver significant
cost savings.
"While the job losses are regrettable,
this action is essential
to help restore the group to an acceptable
level of performance."
One employee told The Northern
Echo: "It's wrong to say it
was totally unexpected, but
it's still a huge blow. We're devastated."
2:11pm Wednesday 7th May 2008
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