Deli chain enters administration

Employees only learned of the company's woes on Monday

The Dundee-based delicatessen McLeish Brothers has gone into administration.

The firm, which employs 205 full-time staff, will close seven of its 10 stores with immediate effect, resulting in the loss of 175 jobs.

Three stores will remain open in Inverurie, Schoolhill in Aberdeen and Whitehall Street in Dundee.

Administrator Iain Fraser of Tenon Recovery in Aberdeen said he planned to keep the business trading while a buyer is found.

Based on a long-established butchery and grocery business , McLeish Brothers was rebranded as a quality Scottish delicatessen when it was taken over in 2007.

The new owners embarked on an ambitious store acquisition programme but, despite generating a turnover in excess of �6m, the company said it had been "severely affected" by the credit crisis and a dramatic fall in consumer spending.

The news came as a shock to the company's employees, who only learned about the company's difficulties on Monday morning.

This was a highly ambitious company with big expansion plans which was well-rooted in the Dundee area

Stewart Hosie
Dundee East MP

Some stores had shut their doors by lunchtime.

Mr Fraser said: "McLeish Brothers quickly captured a niche in the market as a specialist Scottish delicatessen and was on track to achieve its goals of establishing a footprint in most major UK towns and cities.

"We think the business could appeal to an existing retail entrepreneur or national chain that wants to acquire a strong brand and access to a valuable network of Scottish food suppliers established by the company."

Dundee East MP Stewart Hosie said he was "very disappointed" by the news and "heartbroken" for the staff.

He added: "This was a highly ambitious company with big expansion plans which was well-rooted in the Dundee area.

"I am trying to arrange an urgent face-to-face meeting with the company to see if there is a possibility that any help can be offered.

"Given the government has put money into the banks and their insistence that lending should be at 2007 levels it seems incredible that a facility should be withdrawn in the manner reported."