Administrator John Kelly of Begbies Traynor said offers for the company’s bakery in Walsall and the main bakery of its two in Leicester have been accepted, subject to contract. He said all negotiations are bound by confidentiality agreements, adding: “We maintain an ever flexible approach to our management of this administration to maximise the opportunities for selling the business and its assets.”
Industry sources suggest the buyer of the Leicester bakery may be RHM Bread Bakeries. It may need to expand its capacity to cater for increased demand, following new orders such as its own-label deal with Asda.
And options to keep the Walsall bakery afloat could include a management buy-out deal.
Meanwhile, administrators have made further redundancies at Walsall, which is still trading as a going concern. Between 70 and 80 staff were made redundant at the end of last week, reducing the workforce to approximately 320.
The bakery has stopped direct deliveries to the stores of retail customer Tesco and is only supplying its depots and independent shops in the Walsall area. Administrator John Kelly said in a statement the agreement with Tesco had enabled Harvestime to significantly reduce costs, which is part of a constant review of the business.
Distribution costs are understood to have been a key factor in the £250,000 a week losses
that Harvestime (2005) was experiencing when it went into administration in November 2005.