Administrators say the AC Skelton & Sons bakery business will continue to operate as normal as a search for a buyer gets under way.

Hull-based Skeltons, which has 43 shops, called in administrators on March 27, blaming supermarket competition and a recent significant increase in energy costs.

Adminstrators Mark Loftus and Edward Klempka of PricewaterhouseCoopers said that following six years of continuous trading losses, the directors had no alternative but to appoint administrators.

The administrators said they expect it will take four to six weeks to find a buyer. Until that time, all employees and suppliers will be paid in full on the normal dates.

Skeltons employs around 670 people at its bakery and in 43 retail outlets, including eight cafés in Hull. The company also supplies a range of contract products to supermarkets, airlines and foodservice customers - a side it added to its business in 1999.

Skeltons, founded in 1931, was ranked number 24 in British Baker’s Top 50 Bakery Retailers list, published in January. Speaking to British Baker before the list was published, MD Malcolm Skelton said the company planned to develop the wholesale side of its business in 2007. It was to start by supplying four Asda supermarkets with Skeltons’ branded products in February.

Skelton said stepping up the wholesale business would allow it to make use of capacity at its bakery throughout the day. The company already supplied Weight Wat- chers’ products to the supermarkets through Anthony Alan Foods.

On the retail side of the business, Skeltons had planned to launch a new café concept in spring.

At the time, Skelton said the list made him feel nostalgic, as his chain was the only bakery based in Hull, down from 23 chains in the city in the 1960s.

The months since the Top 50 list was published have been unsettling times for many on it: a strategic review continues at Lyndale Foods (ranked number 7); Welsh chain Ferrari’s Bakery (number 15) has been bought out of administration; and sandwich chain Benjy’s (number 20) has been broken up by administrators.

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