Wholesaler Palmer & Harvey (P&H) has entered administration and has ceased to trade.

The appointment was made by the London High Court today on application by the directors of P&H, and covers eight entities: Palmer & Harvey (Holdings) PLC; Palmer & Harvey McLane Limited; Palmer & Harvey McLane (Holdings) Limited; P&H (1925) Limited; P&H Direct Van Sales Limited; P&H Sweetdirect Limited; P&H Direct Limited; and P&H Snacksdirect Limited. WS Retail Limited has not been placed into administration and continues to trade as normal.

Around 2,500 of P&H’s 3,400 employees have been made redundant, including both head office and branch network personnel. The remaining employees will “assist the joint administrators in managing the activities of the business to an orderly closure”, with 450 employees retained within the wholesale business.

Until recently, the company had been in talks with the Carlyle Group about a possible sale, and with tobacco manufacturers about extended credit. However, P&H management were unable to secure additional funding to support the business and, with the prospect of a sale considered unlikely, appointed administrators today.

Matthew Callaghan, Ian Green and Zelf Hussein of PwC have been appointed joint administrators, and are exploring options for the sale of P&H Direct Van Sales Limited, P&H Sweetdirect Limited and P&H Snacksdirect Limited. In the meantime, the business has ceased to trade but around 450 employees have been retained. With the support of its secured creditors, the business was able to ensure the payment of November payroll.

Callaghan 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.

“The administrators are working closely with employees affected by the closure of the business to ensure they receive the support they need during this difficult time to assist with their claims for redundancy and other compensatory payments. Our priority is to ensure that all employees made redundant are assisted in processing their claims with immediate effect. We will be circulating correspondence to all staff as soon as possible which will outline the support available to complete redundancy payment forms.”

The position of retailers expecting deliveries remains uncertain, but a statement from tobacco supplier JTI confirmed that it had prepared alternative arrangements.

“JTI can confirm it was informed today that Palmer & Harvey had unfortunately entered administration. Throughout the whole process JTI has worked continuously to facilitate a constructive solution to the P&H Group’s challenges including extending significant financial and operational support to allow P&H to continue its operations. Regrettably our considerable efforts were not successful. We have a contingency plan in place and we do not expect any significant interruption in the supply of our products.”