350 jobs are lost as electrical retailer Empire Direct fails

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The chain, which has 14 branches, including two in Essex, and a strong online presence, was hit by poor Christmas sales as spending on big purchases such as televisions and washing machines was reined in.

Administrators KPMG reported that Empire Direct had also been affected by the loss of credit insurance, which protects suppliers from the risk of the retailer defaulting on debt.

Last year, the 25-year-old group had a £152 million turnover but bank overdrafts had hit £10.9 million. The figures had led directors to warn about "the ongoing availability of overdraft facilities" as a potential risk in accounts filed in March last year. Today, its stores and website have been shut down.

Empire Direct was run and half-owned by Bradford-based Madan Showan, whose personal wealth had been valued at £50 million.

Administrator Mark Firmin said: "Empire Direct has been severely affected by the economic downturn and experienced a significant reduction in sales from the middle of last year. The business really suffered when credit insurers withdrew cover in October. Low stock levels and operating losses mean the business cannot continue to trade in administration."

There was brighter news from European giant Kesa Electricals, owner of Comet, which reported a better-than-expected interim trading statement — although it still revealed like-for-like sales had fallen 5.5%.

Analysts had forecast sales to be much lower. Some had predicted them to drop by 8.8%. Kesa admitted it expected a tough year, but added: "The trading conditions across all our markets were very tough but Comet delivered a strong post-Christmas sales performance, and overall our businesses continued to make good progress."