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Staff future at Ortak placed in jeopardy

THE future of dozens of staff at jeweller Ortak has been placed in doubt after administrators said a sale of the whole business is unlikely.

in TROUBLE: Celebrities such as Myleene Klass have modelled for the firm that has been in administration since March.
in TROUBLE: Celebrities such as Myleene Klass have modelled for the firm that has been in administration since March.

The company has been in administration since March last year after becoming a victim of tough trading conditions on the high street and rising raw material prices.

Although 29 staff lost their jobs and three stores - the Buchanan Galleries in Glasgow, Ocean Terminal in Edinburgh and the Thistle shopping centre in Stirling - were closed at that time, a further dozen shops remained open with 115 staff retained.

Administrators from BDO have continued to trade the business since then and have repeatedly said they were hopeful of finding a buyer.

In October last year James Stephen, joint administrator and BDO restructuring partner, indicated there were three interested parties.

He also said Ortak was operating profitably and was hopeful of performing well in the key festive trading period.

But yesterday Mr Stephen said in spite of having "explored all options to secure the future of the business" selling all the components as one concern was not likely to happen.

He said: "Regretfully, despite an extensive marketing process and discussions with a number of interested parties over the past several months, a sale of the whole Ortak business appears unlikely.

"However, there is some interest in the assets of the business, principally Ortak's store network including leasehold interests and other associated assets."

No details were given on the prospects for Ortak's head office, a visitor centre or its jewellery manufacturing and design operations in Kirkwall on Orkney.

There were 10 staff let go from head office in the initial redundancy round.

The remaining staff numbers on Orkney was not available, but the company is still thought to have dozens of people working on the island where it was founded.

It had employed 70 people there as recently as 2008.

Mr Stephen said discussions about a sale of parts of Ortak are at an advanced stage with a number of parties.

He also announced there will be a clear out of existing stock at heavily discounted prices which will begin in stores and online from Saturday.

Mr Stephen added: "We continue to be grateful for the support of staff, customers and suppliers throughout this difficult time."

Ortak still has 10 shops in Scotland - including three in Glasgow.

A number of famous names have modelled for Ortak's collections in the past including Carol Smillie and her daughter Christie, Myleene Klass, Suzanne Shaw and Kate Ford.

Ortak was established in 1967 by Malcolm Gray and was latterly run by his sons Alistair, who is also a board director at the European Marine Energy Centre on Orkney, and Stuart.

Mr Stephen has previously said Alistair Gray, who was managing director, and the current Ortak management team are not among the parties looking to buy the business.

The most recently filed annual accounts at Companies House show Ortak made a loss of £77,336 in the 12 months to January 31, 2012 on turnover of £7.3 million.

That compared with a turnover of £7.27m and profit of £111,452 in the prior year.

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