The long-established manufacturer of heritage confectionery brands has not ceased trading but has closed its production plants at Broxburn, West Lothian and Stenhousemuir, Falkirk, until a buyer is found.
A spokesperson for Grant Thornton said its priority is to “sell the company as a going concern, securing jobs while doing the best by the creditors”.
The firm has lost money despite selling more than 140M Highland Toffee bars a year plus other childhood favourites such as Penny Dainties toffee and Pan Drop mints.
This is the second time New McCowan has gone into administration in six years, despite a turnover of £8.42M and a recent upgrade in production facilities. Annual accounts filed with Companies House for the 13 months to 31 March 2010 report losses of £2.38M, adding to the previous year's loss of £1.97M.
Salvation may arrive in the form of investment firm Ambrosia Holdings, which first rescued the well-loved brands in 2006, after McCowans went into receivership in 2005. Manoli Vaindirlis, from Ambrosia Holdings said: “We still believe there's a strong place in the market for the company.” But Grant Thornton is said to be considering other offers.
Counsellor Craig Martin, leader of Falkirk Council, told FoodManufacture.co.uk: “We are naturally very concerned and hopeful that a buyer can be found and that all 103 employees can retain their jobs.”
Until recently, Andrew Walsh, the Dorset-based entrepreneur and owner of confectionery importer Thornycroft, has been subsidising McCowans. But administrators Trevor O’Sullivan and Rob Caven from Grant Thornton officially took over the business on September 16.
Lawrence Wason, Scottish divisional officer of the Union of Shop, Distributive and Allied Workers, said that as there was “very little by way of manufacturing industry in the area any job losses would have a major impact on the local economy”.
This is the latest takeover for the beleaguered firm, originally founded by Andrew McCowans in Stenhousemuir in the early 1920s. Bought by Nestlé in the 1960s, it was the subject of a management buyout in the 1980s, before being bought by Dutch firm Phideas in the mid-1990s.
New McCowans underwent another management buyout in 2003 and was awarded a £125,000 Regional Selective Assistance Grant in 2004 but went into receivership again in March 2005.