With just three weeks to go before he rouses the reindeer, one of Santa's key allies in the UK has fallen foul of the worst Christmas in a generation.

Britain's largest wholesaler to independent toy shops and stationers, JA Magson, has gone bust.

Neil Bennett, the administrator from London turnaround specialist Leonard Curtis who has been called in to save the business, said: "The current financial climate, with reduced spending on the High Street combined with poor weather over this last summer badly affecting toy sales, has not helped this business."

The majority of the 200 staff based in York and at distribution centres including Hailsham, Ipswich and Banbury, have already been laid off.

The 80-year-old company had already been through a major restructuring after being taken over last year by Agilo, a fund specialising in investing in distressed retail businesses.

"This is a company that had recently undergone a substantial transformation but was still, owing to the credit crunch, unable to find a purchaser," said Bennett.