Tea merchant Whittard up for sale

Whittard of Chelsea, a British tea and coffee merchant, is likely to be sold this week, a person close to talks said Tuesday after British media reported the Icelandic-owned company was in trouble.

Several potential buyers have been in talks with Whittard but one offer has come out “more strongly than the others,” according to a spokeswoman who spoke on condition of anonymity because the sale was not yet agreed.

“They’re confident that a deal will go through,” she told The Associated Press.

British media reported Whittard could be placed into administration — similar to bankruptcy protection — and that Ernst & Young would be the administrator. Ernst & Young said it would be issuing a statement on Whittard later Tuesday but declined to give details.

The spokeswoman declined to comment on the company’s viability.

If Whittard collapses, it would be the latest in a series of iconic British retail brands to crumble because of the economic turmoil — joining 99-year-old general store, Woolworths, and dressmaker to the queen, Hardy Amies.

Whittard has been selling tea since London merchant Walter Whittard founded the company in 1886, when Chinese and Indian teas were popular amongst British consumers, on the city’s famous Fleet Street. Whittard soon expanded into coffee, importing beans from South American and Indonesia.

The company was well-known, but small, until a century later when — in the 1980s — Whittard expanded from just three shops to more than 80 in five years.

It currently has 127 stores across Britain and more than 500 employees. It also has outlets in a handful of other countries, including the U.S., Dubai and South Africa.

The Independent newspaper reported that as many as five bids were received from potential purchasers by Dec. 12, but none of them met the estimated asking price of 1 million pounds ($1.5 million). Whittard faced a multi-million pound rent payment for the first quarter of 2009, according to The Independent.

Icelandic investment company Baugur bought Whittard in 2005 for around 21 million pounds. Speculation has also swirled about Baugur’s financial condition after the collapse of the Icelandic economy.

The company also has investments in other British retailers, including the supermarket chain Iceland, toy merchant Hamleys, jewelry chain Goldsmiths and Woolworths. Woolworths filed for administration last month.

Writer: Emily Flynn Vencat, December 2008
Source: Google.com/hostednews