Finsbury Food Group has confirmed it is to close premium baked goods business Grain D’Or, which employs 250 staff.

The company said the decision to close the operation, which is based in Brent, London, is because it has been “historically loss-making”. Grain D’Or supplies own-label products including pastries, muffins and speciality breads to retailers and foodservice customers.

Despite efforts to improve the business – including cost controls and the introduction of new working practices – Grain D’Or has continued to operate at a loss, said Finsbury. In the 12 months to 1 July 2017, Grain D’Or produced an overall operating loss despite generating £28.5m in revenue.

“Following a formal consultation process with employee representatives regarding the future of the business, it has taken the regrettable decision to close its operations,” said Finsbury today (6 October).

“The company has engaged extensively with employee representatives to carefully consider the future of the business. However, no viable alternatives to closure have emerged.”

Finsbury said it would try to offer affected staff employment in other locations, and has entered a period of individual consultations with those employees. It said none of its other businesses were implicated in today’s announcement.

Finsbury Food Group last month said its focus on driving efficiency and scale had helped it weather challenging market conditions. In its preliminary results for the financial year ended 1 July, the bakery business announced that group like-for-like revenue rose 0.3% to £314.3m, with adjusted EBITDA up 2.7% to £24.9m.

Grain D’Or was part of the Fletchers Group of Bakeries acquired by Finsbury Food Group for £56m in 2014. Finsbury also acquired foodservice business Kara in the deal. In 2013, Fletchers undertook a £4m expansion of the Grain D’Or manufacturing facilities, converting three industrial units into a “state-of-the-art bakery facility and dispatch centre”.