Over 50 Austin's staff told P45s are in preparation after modest but unsustainable growth

The company told staff it did everything to safeguard jobs but despite growth of 3.4 per cent last year and 14 per cent this year to date, management believed the retail operation to be unsustainable in the long-term.

DUP MLA Gary Middleton said it was a big shock for the workers themselves but also for the entire city.

“It’s a very sad blow for the staff who’ve been informed this morning that the store is closing and they’re going to be left out of work. Not only is it a blow for them but it’s a blow for the entire city.

“Austin’s is the oldest department store in Europe and is also an instantly recognisable landmark in the heart of Londonderry. It’s very worrying in terms of the city centre economy.”

In a letter, delivered to staff on Tuesday morning, the firm said it had managed to weather the financial crash and the subsequent recession but that the store needed significant investment to help get back to profit long-term. This wasn’t forthcoming.

“Trying to survive in such difficult times has been very painful for everyone involved and despite our business having grown 3.4 per cent last year and by 14 per cent so far this year, the recovery is not strong enough yet, to enable us to continue trading in the present format.

“The store needs and has needed for some time significant investment to get back to profitability.

“So far that investment has not materialised and therefore to prevent losses continuing, the very difficult decision has had to be taken to cease trading.”

The letter also explains that the landmark building was due to close shortly for renovations and that the cessation of trade would have further knocked back the store’s attempted return to long-term growth.

“To compound matters our Landlord is required to carry out significant and essential maintenance to the building, which in itself would require the store to be closed for potentially several weeks at least,” the letter explains.

“This in itself would have adversely affected the store’s ability to operate normally. This would have inevitably damaged the fragile recovery that is now happening,” it adds.

Management thanked the Austin’s employees saying they had done their utmost.

“We have done our absolute best and no-one can criticise us for that. In the face of so many difficulties in retailing, we as a team should all feel justly proud for what we have achieved and to have come this far. As for now, it is with regret that we have no alternative but to close.

“We wish to thank you for your service and wish you the best of luck in the future.”

Following a meeting on Tuesday morning Hassonzender Limited, trading as Austin’s, entered liquidation.

Ronan Duffy of McCambridge Duffy was appointed as liquidator and a meeting of creditors is scheduled to take place on March 21.

In a separate letter to staff the local insolvency practitioner stated: “Regrettably, as a result of the Company entering into liquidation your employment has now ceased.

“Your P45 will be prepared today and will be made available to you on Friday, March 11.”

Staff are invited to attend ‘help clinics’ at Da Vinci’s on Friday, where they’ll be offered advise on how to obtain outstanding wages, pay and redundancy payments owing to them.