Gladedale joins victims of credit crunch with closures

Gladedale, one of the UK’s largest private housebuilders, has become the sector’s latest casualty of the turmoil in the financial markets.

The firm, which builds 3,900 homes a year, is planning to close office in Alfreton in Derbyshire and merge its Manchester and North-west businesses as part of a drive to slash costs.

In a letter to staff, Giles Asker, managing director of the firm’s central division, said: “We have decided to review the central divisional structure and overheads. We will enter into consultation with affected staff.”

The closures will affect at least 40 people.

It is understood that the firm is re-interviewing staff at its office in Balborough, Derbyshire, with a view to accommodating some of the Alfreton staff.

Asker said: “Gladedale as a business has expanded greatly in the central division and opportunities are being explored to restructure the business in the most effective manner and allow continued growth.”

The problems at Gladedale follow a rapid growth strategy that raised eyebrows in the industry. Since 2003 it has spent more than £250m on four acquisitions, including £83m on the Yorkshire-based housebuilder Ben Bailey.

The move is part of a general reaction among housebuilders to the credit crunch. This was the worst week for the UK financial market since 9/11.

Persimmon and the Buckinghamshire-based Nicholas King Homes this week joined a host of housebuilders demanding cost reductions from suppliers. Some regions of Charles Church, a division of Persimmon, wrote to suppliers asking for a 5% discount on all orders.

Persimmon sent a letter to suppliers saying: “We stress that this pain may only just be beginning and inaction will only result in us going backwards.”

It said subcontractors who made the cut would be favoured for work and asked for responses by the end of January. It is also making 200 redundancies.

Nicholas King said it had asked its suppliers for a 10% discount.