THE North East’s biggest independent betting shop operator has collapsed with the loss of 125 jobs after it fell into the red trying to build a nationwide chain.
Durham-based Pagebet Bookmaker has gone into administration after growing from just 15 shops to 53 branches in three years.
Administrator PricewaterhouseCoopers has sold on 27 outlets, employing 131 staff, to Oxfordshire-based bookmakers chain Stan James and three sites, employing 13 staff, to Newcastle-based Platinum Leisure (North East).
But 23 stores have shut and 125 staff have been axed. These include five branches in the North East with others across the North of England.
The company had grown quickly in recent years buying stores from other operators and opening its own stores.
But its administrators said that despite winning millions of pounds of investment its cash-flow has dried up.
Its most recent trading figures showed annual losses increased from £484,000 in 2007 to £2.3m in 2008, despite the firm growing its turnover from £11m to £28m.
PwC said one reason for its collapse was an aggressive expansion strategy as it aimed to run 100 sites despite the economic downturn. The company said it had been forced to absorb a large proportion of the costs associated with the liquidation of its online business Pagebet Limited earlier this year.
Craig Livesey, joint administrator at PwC, said: “Pagebet Bookmakers has experienced very challenging trading conditions and has generated significant losses.
“Whilst we are pleased to have been able to sell over half the business straight away saving a considerable number of jobs, unfortunately we have not found a buyer for the other 23 betting offices, which have had to close immediately.”
Pagebet chief executive and co-founder Austin Carney said: “I am bitterly disappointed that we have not been able to make good on the plans that we had in place and am sorry for those that have had to lose their jobs as a result.
“My priority at this time is our staff and customers and I must thank Stan James for everything they have done to make this a smooth transition.
“It has been difficult to manage our commitment to growth during the downturn, though there are a number of issues that have led to this situation.”
Mr Carney fell out with co-founder David Archer over the company’s decision to move away from the online gambling market.
This saw Mr Carney announce in October 2008 that he was resigning from the company by mutual consent, only to return three months later to replace Mr Archer, who is still a shareholder in Pagebet, as chief executive.
Yesterday Mr Archer said: “Following my resignation the company closed its internet betting business and acquired a number of further shops in London. In my view these were poor decisions which have not helped Pagebet or its staff.”
In response a spokesperson for PwC said: “We are aware that there has been disagreements over the strategic focus of the business.”
Customers may claim their winnings at any Stan James shop or by posting the betting receipt ticket to Stan James, Grove Technology Park, Wantage, Oxfordshire, OX12 9FN. They can also call a helpline on 0191 332 4519.