Latest on City Link administration

5 January 2015

The well-known parcel delivery company entered administration over the Christmas period after suffering from ‘substantial losses’, resulting in over 2,300 employees losing their jobs. 

On Christmas Eve, joint administrators Hunter Kelly, Charles King and Tom Lukic from EY were called in by the company’s owners, Better Capital, to oversee the administration process after no buyer could be found. The next day, thousands of customers were told to either collect their parcels as soon as possible or risk losing them. 

The RMT union and thousands of employees hit back at the way they were told over Christmas as many heard about it on Christmas Day either on the news or on social media. On a day where families should have been enjoying festivities and relaxing, many feared they had lost their job. By New Years Day, it was confirmed that 2,356 employees were being made redundant.

The Coventry-based company is no longer accepting parcels but has operations in place across sites to help customers pick up their parcels.

On Christmas Day, Hunter Kelly stated, “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 will provide support to employees relating to potential redundancies. We are now beginning the process of realising the company's assets.”

According to reports, City Link was losing £500,000 a week before it went into administration. Its owner bought the business for just £1 in 2013. Administrators are expecting depots to stay open until tomorrow for customers where 30,000 parcels are still being held for collection. 

UPDATE 7th January: EY has sold off £1.125m of assets to City Link's rival, DX Group, to help recover debt for creditors. It has also been confirmed a further 230 employees are to be made redundant between now and the 15th January. 51 of the company's depots will also be closed by this date. They are still holding 20,000 parcels, which will now be moved the Coventry HQ. From there they can either be collected by customers or parcels will be delivered using an alternative courier. 

We are not involved in the administration and questions should be directed to EY who are handling the administration.

If you are an employee of the business, please listen to the video below as it will tell you your rights as an employee of an insolvent business.  There is a link at the end of the video to the Government website which expands further on what you need to know.