Cooplands of Scarborough has bought Skeltons from administration in a deal which almost doubles its estate from 43 to 77 shops and makes it the UK’s fourth-largest bakery chain.

The deal includes 34 of Hull-based Skeltons’ 43 shops as well as the Skeltons factory in Lorraine Street, east Hull, which is now set for "a major investment programme that will take its facilities into the 21st century".

And the shops are set to be refurbished and re-branded as Cooplands in a rolling programme, to bring them up to the "high specification" of its other shops, it said.

Paul Coopland, MD of Cooplands, said the deal had saved 500 jobs, boosting his workforce to 1,100. The new business will complement Cooplands’ existing bakery in Scarborough and shops around the north-east.

Coopland said: "We are extremely pleased to have secured this deal, helping make us the largest independent bakery chain in the north of England."

The new bakery would allow it to ease pressure at its Scarborough bakery, which was operating at capacity, Cooplands added.

Joint administrator Edward Klempka of PricewaterhouseCoopers said Skeltons’ cake-making division, with two shops in Grimsby and Hull, was still on the market. Part of its wholesale business has gone to Martins Bakery, in Manchester and the rest has ceased trading. And seven shops have closed since administrators were called in on March 26.

Skeltons blamed increased competition from supermarkets and rising energy costs for its woes. The company also had a deficit in its pension scheme, projected to rise to £4m over its lifespan.

Klempka said: "This was a fourth generation family-run business and there was a lot of pride in the way it was run. However, there were real issues, including annual trading losses of around £1m for several years."

Cooplands is now the UK’s number four bakery chain on shop numbers, behind Greggs, Lyndale Foods and Cooks the Bakery.