Leamington Desserts lays off 45 staff - and still no news on a sale

04-Jan-2011 - Last updated on 04-Jan-2011 at 11:15 GMT

Forty-five staff have been laid off at the former PoleStar Foods frozen desserts factory at Leamington Spa over Christmas.

KPMG was appointed administrator for Leamington Desserts Ltd on November 30 after a cash injection from Privet Capital secured 255 jobs at the PoleStar factory in Okehampton but failed to guarantee the future of the Leamington site.

Joint administrator Will Wright told FoodManufacture.co.uk this morning that he had received no formal offers for the business - which manufactures own-label frozen desserts for supermarkets and caterers - by the December 22 deadline.

“The offer deadline came and went and we are now in discussions with the parent company as to where we go from here.”

He declined to comment on whether he remained confident of selling the business as a going concern but said the site was still operational at the moment with around 120 staff.

The latest round of redundancies at the site had been signalled by PoleStar last autumn after chief executive Keith Ellis stepped down following disagreements with the chairman and board.

Structure ‘not fit for purpose’

PoleStar was formed in December 2009 following the acquisition of Heinz’s UK frozen desserts business, with financial backing from Bank Leumi (UK).

However, commercial director Sue Garfitt said that bosses had “inherited a structure that was not fit for purpose” which had made it hard to turn the loss-making business around in the months following the acquisition.

Things finally came to a head in late November when Privet Capital stepped in to prevent PoleStar's immediate collapse and acquired 100% of its equity, while Centric Commercial Finance provided facilities to support the buyout and growth of the company.

However, administrators were appointed to the Leamington factory, which Privet described as "significantly loss-making".

According to a site advert, Leamington Desserts has an annual turnover of around £10.5m, split between retail (65%) and food service (35%) customers, while its production facility covers 5,740m².

2 comments

Who are the Joint administrators?

Posted by M Chowdry, 05 January 2011 - 17:31 GMT

KPMG failed to mention who is the parent's administrator?

Polestar Foods Ltd is the company which has placed its own business Leamington Desserts into administration, and still remains as the current parent administrator of Leamington Desserts Ltd.

KPMG has been contracted by Polestar Foods to act on its behalf as administrator.

But Polestar Foods Ltd still refuses to pay redundant staff their right to their redundancy pay. Why?

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Polestar Foods planned this months ago!!

Posted by M Chowdry, 05 January 2011 - 17:12 GMT

PoleStar planned to go into administration months ago.

I’m one of many of employees who were made redundant on 24rd December 2010.

This company has always been under the eye of the American Food giant, Heinz Foods Ltd. There is clear evidence which has recently been obtained from previous management indicating Heinz involvement with Polestar Foods Ltd, still today.

Only recently a documentary has been produced which will be aired within the coming months, titled ‘Sweet Dreams’. This Programme will show huge amounts of information detailing to Heinz involvements with the birth of Polestar Foods Ltd and how Heinz were not prepared for another embarrassment like the HP issue in Birmingham, which was raised at Westminster Parliament.

Polestar Foods Ltd was formed in November 2009, when it brought the Oakhampton & Leamington Spa sites. I was a member of the Joint Consultative Committee during the period of sale from Heinz Foods to PoleStar Foods. It was then, when it was made clear that Heinz needed to create a new company to strip down the Leamington Site.

When Polestar Foods took over the business back in November 2009, this was the very reason it created three separate companies; Polestar Foods Ltd, Oakhampton Desserts Ltd and Leamington Desserts Ltd.

The reasons for the last 45 staff to be made redundant were due to the new one shift system, which should have started on 4th January 2010.

During my appeal, I was told that even with the shift system now no longer changing; Polestar still wanted us to leave the business, so they wouldn’t need to pay the 45 staff notice of pay in lieu.

I and many others have not received any redundancy pay and have not been paid any final wages.

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