City Link parcel delivery company goes into administration

UK parcel delivery company City Link, which employs 2,727 people, has gone into administration.



The company, owned by investment firm Better Capital, called in administrators on Christmas Eve after years of "substantial losses".

It stopped accepting parcels from customers at its head office and transport hub in Coventry, its three other transport hubs and 53 UK depots.

Administrators warned of "substantial redundancies" over the coming days.

This is because no buyer has been found to save the company.

Operations will be suspended at all the company's depots until Monday when customers and recipients will be able to collect their parcels.

Hunter Kelly, joint administrator to City Link with Ernst & Young, said: "City Link Limited has incurred substantial losses over several years.

"These losses reflect a combination of intense competition in the sector, changing customer and parcel recipient preferences, and difficulties for the company in reducing its cost base.

"The strain of these losses became too great and all but used up Better Capital's £40m investment, which was made in 2013 and intended to help to turn around the company.

"Despite the best efforts to save City Link Limited, including marketing the company for sale, it could not continue to operate as a going concern and administrators were appointed.

"We will provide support to employees relating to potential redundancies. We are now beginning the process of realising the company's assets."

Mick Cash, general secretary of the RMT union, said: "This is the bitterest blow any group of workers could receive on Christmas Day and it is absolutely shocking that the company have sprung this announcement once all the Christmas deliveries have been completed.

"RMT will do everything within its power to mobilise a political and industrial fight to save the thousands of jobs that have been put at risk as a result of this shock announcement."

This company has been in trouble for some time.

Their accounts over the last few years make interesting reading!

City Link are wholly owned by BeCap city Link.

BeCap are Better Capital, a venture capital type of company run by Jon Moulton. I believe they bought the company for £1.00. Frankly, I thought Moulton had far more decency about him than to allow such an announcement to go out on Christmas day. I used to rate Moulton, but I think I now need to reappraise my views.

http://www.independent.co.uk/news/busin ... 46628.html

City Link's closure leaves a million parcels in limbo

About a million parcels are believed to be still in depots of defunct courier firm City Link, which went into administration over Christmas.

The 45-year-old company stopped taking any new deliveries after administrators Ernst & Young failed to find a new buyer and more than 2,700 people are set to lose their jobs. Roger Sumner-Rivers, founder of London-based firm ParcelHero, which acts as a broker between businesses and couriers, said he had been told that "no further deliveries will be made" but "depots will open again on Monday for customers to collect the estimated one million parcels stuck in its network".

In a statement, Ernst & Young advised people to use City Link's tracking system to find where to collect undelivered goods.

Retailers who used City Link, such as John Lewis and Amazon, have had to take emergency measures to ensure the delivery of parcels. Mr Sumner-Rivers said the firm's closure could have a major impact on the UK parcel market. He said there were now "serious concerns as to how the carriers left in the market are going to be able to absorb the estimated 76 million additional parcels City Link delivered each year".

"The companies will all require immediate service, which will put a huge burden on every carrier's infrastructure, from the sales department right through the network to the delivery couriers at the other end," Mr Sumner-Rivers added.

A rather interesting interview with Moulton from earlier in the year...

"There are only two requirements needed to be regarded by everyone as a 'financial genius', a rising market and a short memory." [Bob Beckman]

City Link workers' hopes dashed after 11th hour bid fails



Hopes for workers at parcel firm City Link have been dashed after a bid to buy the company failed this afternoon.

The administrators of City Link said there would be 2,356 job losses after announcing the failure of the bid.

Many of the Coventry-based company’s staff found out about its collapse on Christmas Day and had been warned to expect “substantial redundancies”.

The administrators said 371 people have been retained to deal with remaining parcels and to assist in realising the company’s assets and winding down its operations.

Talks took place today between administrators and an ‘interested party’ – in a bid to strike a deal which could save all 2,727 jobs across the UK.

But at a protest at the firm's Baginton HQ this afternoon union leaders revealed talks were suspended due to a difference in the valuation of the company and the bid.

In a statement this evening, Hunter Kelly, joint administrator of City Link Limited, said: “It is with regret that we have to announce substantial redundancies at City Link Limited, which ceased accepting new parcels on 24 December 2014.

"The company endured substantial losses, which ultimately became too great for it to continue as a going concern, and City Link Limited entered administration following an unsuccessful sale process.

"At meetings across City Link Limited’s UK sites on Monday 29 December 2014 and Tuesday 30 December 2014, employees were informed that there would be substantial redundancies as no new business was being taken on. Many of these employees were sent home, and informed that they would shortly receive formal correspondence to confirm their work status.”

News of a possible buyer for the business came earlier as union members and City Link staff held a protest outside the company’s headquarters in Baginton.

Workers travelled from across the country – some as far as Scotland – to protest against the job losses after the company collapsed into administration on Christmas Eve.

City Link worker Mick Ward travelled for almost six hours from his home in Glasgow to take part in yesterday’s protest. He said: “We are absolutely devastated by recent events. There are three of us in my family working for City Link – myself, my daughter and my son – and we have all lost our jobs.

“I am an RMT representative and I got a call from them on Christmas Eve, just after lunchtime, to tell me the news. But when I rang City Link, they denied it right up until 6pm, when they made the announcement.

“I think the way they have treated workers is an absolute disgrace and we are here today to show solidarity.”

City Link: Further redundancies as depots close down

The administrators of collapsed parcel delivery company City Link have announced a further 230 redundancies at the firm, taking the total to 2,586.

EY, which took over the running of City Link on Christmas Eve, said the cuts would take effect between 7 and 15 January.

The move comes as EY closes depots, with 51 due to be permanently closed by 15 January.

"It is no longer viable to continue operating these depots," said EY.

Hunter Kelly, joint administrator of City Link, said: "It is with regret that we announce further redundancies at City Link,"

However, EY said a total of 141 staff would be retained at City Link's Coventry head office and transport hub, as well as a number of its other sites to help with the winding down process.

EY said City Link still had about 20,000 parcels in its network, which would be sent to its Coventry hub to be collected by customers or returned via an alternative parcel carrier.

City Link directors to face criminal proceedings

Three former directors of doomed Coventry delivery firm City Link, which told thousands of workers they were losing their jobs on Christmas Day, have been charged with criminal offences.

David Smith, Robert Peto and Thomas Wright are each being prosecuted for offences of failing to notify the Secretary of State over plans to make redundancies.

The parcels company, which is based in Siskin Parkway West, Baginton, was placed into administration at 7pm on Christmas Eve last year following several years of losses.

A total of 2,727 workers - 600 of which were in Coventry - found out the news they were to be made redundant on Christmas Day.

And now the Department for Business, Innovation and Skills has confirmed that Smith, Peto and Thomas have been charged.

Smith was the managing director of City Link at the time of its demise while Peto was finance director.

A Department for Business, Innovation and Skills spokesman said: “We can confirm that criminal proceedings have been commenced against David Smith, Robert Peto and Thomas Wright.

“They are charged with offences contrary to section 194 of the Trade Union and Labour Relations (Consolidation) Act 1992.

“We will not be commenting until the criminal proceedings have been concluded.”

Following the firm’s collapse, Jon Moulton, the founder of Better Capital which acquired City Link before it went bust, later told MPs he had done everything to save the company.

He told a joint meeting of the Scottish Affairs and Business Select Committees earlier this year that his company lost £20million after City Link went out of business.

Mr Moulton said the intention was to tell staff on Boxing Day that the company was going into administration, timing which was “less evil”, but rumours started circulating on Christmas Eve.

“Absolutely no-one wanted the announcement to be made on Christmas Day,” he told MPs.

At most they'll get a slap on the wrist. It doesn't help those that lost their jobs or money!