Wallgate to raise 1 mln pounds

LONDON (Reuters) - Consumer electronics company Wallgate Group WGTW.L announced on Friday it was putting its store chain into administration and said it may have to make cuts if it fails to raise 1 million pounds next month.

Wallgate, which manages returned goods for manufacturers, retailers and distributors, said in a statement its retail subsidiary, Hitchens, was losing money as a result of poor summer weather and the economic downturn. Hitchens is a store chain covering northern England and the Midlands.

The company, based in Bolton, said it plans to keep two stores and its e-commerce trading divisions, Hot Deals and Best Price Trading. It said it was launching a deeply discounted equity issue to raise at least 1 million pounds by Nov 28, which would enable it to pay creditors, buy stock and continue trading.

The company had been talking to potential investors for a number of weeks and was confident of raising the money, it said.

However, it added: "In the event that a minimum of 1,000,000 pounds has not been raised by Nov 28 through the proposed placing, the company will need to explore alternative sources of funding as a matter of urgency and may be required significantly to curtail its operations and further review its business strategy."

(Reporting by Philip Waller; Editing by Quentin Bryar)