PwC has been appointed as administrators with Matthew Callaghan and Zelf Hussain, partners at PwC and Ian Green, PwC head of recovery services, acting as joint administrators of Palmer & Harvey McLane Ltd and a number of associated companies in the group. However, WS Retail Ltd has not been placed into administration and continues to trade as normal.

Palmer & Harvey McLane has around 90,000 customers ranging from small local corner stores to the UK’s largest supermarkets, including Tesco, and is the UK's biggest tobacco supplier. It operates a delivery network of 14 regional distribution centres which supplies up to 12,000 product lines. P&H Direct Ltd, one of eight companies in the group to have ceased trading, provides product delivery services to independent retailers and food outlets.

The administrators said the group has been by hit by challenging trading conditions in recent months and efforts to restructure the business have been unsuccessful. This has resulted in cash flow pressures and it has not been possible to secure additional funding to support the business.

The P&H Group employed around 3,400 employees and there have been around 2,500 immediate redundancies at head office and the branch network. The remaining employees will assist the joint administrators in managing the activities of the business to an orderly closure.  Currently 450 employees have been retained within the wholesale business.

With the support of its secured creditors, the business was able to ensure the payment of November payroll.

The administrators are continuing to explore options for a sale of P&H Direct Van Sales Ltd, P&H Sweetdirect Ltd and P&H Snacksdirect Ltd, which are all subsidiaries of Palmer & Harvey McLane (Holdings) Ltd.

Matthew Callaghan, joint administrator and PwC partner, said: ‘The Palmer & Harvey name has been a trusted partner for retailers and suppliers for nearly 100 years. This is a devastating blow for everyone who has been involved in the business. The administration team will focus on working with employees, clients and suppliers to facilitate a smooth and effective wind-down or transfer of operations over the next few weeks.

‘The P&H Group has faced a challenging trading environment, and the need for significant restructuring has been recognised for some while. The company has insufficient cash resources to continue to trade beyond the short term and the directors have concluded that there is no longer any reasonable prospect of a sale. Therefore, the directors have had no choice but appoint administrators.’

Report by Pat Sweet