Iconic Newcastle business Darby’s Pies has folded with debts of $3 million and 120 people left unemployed.
The business was placed into voluntary administration in March while attempts were made to save it and preserve jobs.
But owner Victor de Vries said on Monday that it became apparent on the weekend that the beloved pastry network could no longer survive.
“We had been trying to stay afloat for as long as we could but we simply couldn’t go on anymore,” he said.
“You have to be realistic, when you run out of money you have to stop. It was time to get out before things really started to hurt.”
Staff learned their fate at a meeting at Darby’s Gateshead bakery on Monday.
“Some of them have been with me for 20 years,” Mr de Vries said.
“I don’t think they were surprised, but it hurts.”
The once bustling bright red shop on Darby Street near where the business began in 1969 was an empty and forlorn sight on Monday afternoon.
Another meeting has been called for Thursday to discuss future pathways for staff.
“I have already helped a some of them get new jobs, Mr de Vries said.
Administrator Brad Morelli said on Monday that the business had continued to experience tough trading conditions since a Deed of Company Arrangement was put in place in May.
"The business owners have taken active steps and have advised us of the position, prior to there being a breach of the terms of the Deed of Company Arrangement,” Mr Morelli said
“However, the business cannot continue to trade and therefore liquidation looks inevitable.”
It is hoped that employees will receive their full entitlements.
“While the Company is not in a position to make payment of outstanding entitlements today, employees will be able to access the Federal Government’s Fair Entitlement Guarantee Scheme if the company proceeds to liquidation at the meeting of creditors to be held on October 10, 2018,” Mr Morelli said.
Mr de Vries said the majority of the business’s $3 million debt was owed to the bank.
He blamed two warm winters and the rise of online shopping leading to fewer customers in the big regional shopping centres, where many of Darby’s stores are located, as the primary cause for the business’s demise.
“If I had 20 Darby Streets it would be all right,” Mr de Vries he said.
“One dollar pies were fine when wages were $10 an hour; these days they are more like $30 an hour. There are so many costs, superannuation, insurance. Electricity, gas water keeps getting more expensive.”