Albion collapse is further blow to Scots chain

The collapse of specialist management company Albion Contracts earlier this month has dealt a further blow to Scotland's Leonardo & Co Italian restaurant chain, which went into receivership on 4 January.

Albion was brought in to run Leonardo's seven restaurants last month but has itself now gone into provisional liquidation.

Albion specialised in providing management and staff for pubs and restaurants on a contract basis rather than owning any properties itself.

Despite the latest setback, Leonardo's receiver Bruce Cartwright believes that a buyer will be found for the group by the end of this month.

Leonardo's is one of a number of high-profile closures to have hit Scotland since the beginning of the year.

The closures are part of an overall downward trend in Scotland, which has been much more dramatic than in the rest of the UK.

The number of insolvencies in all sectors in Scotland was up by 20.6% between the fourth quarter of 2000 and fourth quarters of last year and the annual figures were at their highest for a decade in 2001.

The Scottish economy has been badly hit by both foot-and-mouth disease as well as by a considerable drop-off in tourism.

There are also concerns that banks may be acting sooner rather than later in seeking to close indebted businesses rather than let them ride out the economic storm.

Matt Henderson, recovery and reorganisation services partner with accountants Grant Thornton, said: "The dramatic rise [in insolvencies] indicates that many Scottish businesses must have been close to failure but a sudden decline of confidence in the global economy - perhaps due to the events of 11 September - has just pushed them over the edge."