City Link calls in administrators after failing to stem “substantial losses”

City Link calls in administrators after failing to stem “substantial losses”

UK parcel carrier City Link went into administration on Christmas Eve, with administrators Ernst & Young citing “substantial losses” at the Coventry-based firm. On appointment of the Joint Administrators, City Link Limited ceased to accept any further parcels from customers at either the Company’s head office and transport hub in Coventry; its three other transport hubs in West Drayton (Heathrow), Peterborough and Warrington, and its 53 depots throughout the UK. The Company has entered administration as a result of continued substantial losses and is unable to continue accepting new parcels due to the further losses it would incur.

Operations at City Link Limited’s transport hubs and depots will be suspended until 29 December 2014 to allow the Administrators to assess the Company and the status of existing orders. The Company depots will reopen to the public on Monday 29 December 2014 and will remain open for a short period of time to enable customers and intended recipients to collect their parcels.

Customers who placed parcels with City Link Limited on Christmas Eve for delivery are urged to go to the depot to retrieve their parcels as soon as possible on or after 29 December 2014. Intended recipients of parcels who have been notified of a failed or pending delivery are also urged to go to the depot to collect their parcels as soon as possible on or after 29 December 2014. City Link Limited’s online parcel tracking system remains live to enable customers and intended recipients to locate their parcels. The online tracking system should be used by customers and recipients to identify if they need to collect their parcels and at which depot their parcels are located. The normal helpline telephone numbers will also be open on Saturday 27 December 2014 and from Monday 29th December 2014. City Link Limited will no longer be able to deliver any further parcels and customers are urged to make alternative arrangements for future deliveries.

At this stage, no redundancies have been made amongst City Link Limited’s 2,727 employees. However, it is anticipated that there will be substantial redundancies over the coming days, as no buyer has been identified following a sale process for the Company and its business.

Employees that are ultimately affected by redundancy will be offered appropriate advice and support in making claims for redundancy and notice pay. Employees that are not immediately affected by redundancies will be retained to help return parcels to customers at City Link Limited’s locations, as well as assist in realising the Company’s assets and winding down its operations.

City Link (Properties) No.1 Limited manages and coordinates payments on selected property leases on behalf of City Link Limited, and has no employees. The Administrators will begin winding down City Link (Properties) No.1 Limited.

“Substantial losses”

Hunter Kelly, Joint Administrator to City Link Limited, commented: “City Link Limited has incurred substantial losses over several years. These losses reflect a combination of intense competition in the sector, changing customer and parcel recipient preferences, and difficulties for the Company in reducing its cost base.

“The strain of these losses became too great and all but used up Better Capital’s £40m investment, which was made in 2013 and intended to help to turn around the Company. Despite the best efforts to save City Link Limited, including marketing the Company for sale, it could not continue to operate as a going concern and Administrators were appointed.

“We have temporarily suspended operations at all transport hubs and depots until Monday 29 December 2014, when we intend to reopen depots to the public to enable customers and intended recipients to collect their parcels. We will also provide support to employees relating to potential redundancies. We are now beginning the process of realising the Company’s assets.”

Any parties interested in acquiring any parts of the business or its assets should contact the Joint Administrators immediately. The Joint Administrators will provide a further update on the status of the administration over the coming days.

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2 Comments

  1. intercountylink

    As a sub-contractor owed £ 17,000 + by these robbers with staff we are about to make redundant it annoys me that I received an interesting phone call yesterday saying there had been a poster on the wall of our local DPD depot saying that a major courier company was to close Christmas Eve, and i also found out that John Lewis had been putting parcels into their network because the courier they were using was about to close, these things happened 3 – 4 weeks ago!!! does that not make City Link Directors guilty of obtaining goods or services by deception i.e. FRAUD. It would appear they just strung us along knowing full well going into peek at the end they would close

  2. Paul Jackson

    This is appalling and the entire blame goes to the wizz kids at Rentokil who purchased Target and then insisted on putting it together with City Link. Oil and water do not mix. Colin Millbanks managed to merge behind the scenes Interlink and Parceline but never the customers or depots.

    It will be interesting to see if DX make the same mistakes with Nightfreight?

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