MORE than 400 jobs were under threat last night after one of the country’s biggest bakeries went into administration.

Durham City-based Peters Cathedral Bakers Ltd - trading as Peters Bakery - called in administrators yesterday blaming the tough retail environment and rising energy and commodity prices for its failure.

The news comes as a second blow for a city still reeling from the announcement that Kerry Foods, which stands only yards from the bakery site, looks set to close next month with the loss of 350 jobs.

And it follows hard on the heels of the announcement that 281 staff at the former Cumbrian Seafoods plant in Seaham, are facing a grim future after Young’s Seafood decided to shift production to other factories.

Family-run Peters Bakery will continue to trade while attempts take place to find a buyer, but administrators KPMG warned that it was expecting a number of redundancies to be confirmed "in the coming days".

Peters Bakery has been based in Durham City for more than 40 years. It opened its first shop, in the Belmont area, in 1966 and is now based in a 50,000 sq ft state-of-the-art bakery on Dragonville Industrial Estate.

Since then it has grown into one of the UK’s largest independent bakers, with 58 stores spread from Northumberland to North Yorkshire as well as supplying a number of leading supermarkets.

Administrators said the company’s most recent financial statements show it had a turnover of more than £12m and 403 employees.

Mark Firmin, KPMG’s Northern head of Restructuring and joint administrator, said: "The challenging retail environment on the high street is exacerbated by rising commodity and energy prices squeezing margins in this sector.

"These factors, along with reduced volumes with its wholesale customers, has led to the failure of this 46 year old family business.

"We will continue to trade the bakery - which has a state of the art production facility, a 100-strong product range and a loyal workforce - while seeking a buyer and will be assessing and reviewing all aspects of the business."

The company has been through difficult times before. A devastating fire destroyed the company’s headquarters on Dragonville Industrial Estate in 2004 and closed the company’s shops for a month while supplies were disrupted.

However, the company invested £9m in a new purpose-built bakery which opened on the same estate in 2005.

Only last year, Peters added a new fleet of vans to its operations to try to capitalise on direct sales to office workers.

Workers leaving the firm’s Durham premises last night declined to comment.

The city’s MP, Roberta Blackman-Woods, said: "This is really dreadful news, especially coming on the back of the closure Kerry's Foods.

"Obviously, I hope to meet with the management and workers at the bakery in the very near future to see if anything can be done to save these jobs, or at least some of them.

"I am extremely concerned about the workforce at this time and would like to assure them that in the terrible event that the jobs are lost I will work with the job centre and other agencies to find suitable opportunities for those affected.

"This again highlights the lack of a growth strategy for the North-East; an issue I will be raising with the Government at the earliest opportunity."

The company’s sales director Chris Knowles was not available to comment last night.