CONCERNS have been raised over the effects the collapse of Officers Club will have on Cramlington.

Hundreds of jobs have been lost after the national fashion store chain, based in the town, faced trouble for the second time in three years.

Now Coun Wayne Daley, Conservative councillor for Cramlington North, has said he fears the negative effects the collapse will have on Cramlington if action is not taken to make it more attractive to new employers.

All but a handful of the 75 staff working at the company’s headquarters in Cramlington and all those at its Newcastle warehouse have been made redundant.

Coun Daley said: “Due to the nature of the work they do there a lot of mums who could take up flexible shifts work there and young males because it was a relatively low skill job, picking and packing.

“This will have a substantial impact on Cramlington. They were a very flexible employer and people could work to fit around their childcare. There are not many employers in Cramlington who can offer that.

“Hopefully we will get some new employers coming into Cramlington.”

Around 500 jobs were lost as Officers Club went into administration but around 400 were saved with the sale of 46 of its 102 shops to larger rival Blue Inc. The rest of the stores were shut last week.

Joe McLean, of administrator Grant Thornton, said the rising cost of raw materials such as cotton and the slump in high street spending had led to the chain’s collapse.

He said: “The company experienced particularly challenging trading conditions in 2010 with raw material costs rising significantly.

“It was not possible to pass these increases on to customers given the extremely price sensitive nature of the UK retail arena.

“The directors did not see any improvement forthcoming in the early months of 2011 and concluded reluctantly that administration was in the best interests of creditors and other stakeholders.

“It is regrettable that a purchaser for all of the company’s business and assets could not be located.”

The company has faced problems before. Its founder, David Charlton, used a pre-pack administration deal in 2008 to place the company in administration, only to buy back 118 of its 150 stores on the same day.

He had built up the business again and it saw sales of around £55m in 2010 and earnings of £3.3m. Mr Charlton said in December that he had planned to open another 20 stores this year.

He launched the company nearly 20 years ago buying cheap menswear from Asia and selling it under its own-brand labels.

But the economic slump has hit retailers hard and it is one of a growing number of corporate casualties expected this year.

Mr McLean added: “Things like fuel price rises, VAT increases and taxes are affecting consumer spending, and when you add to the fact Officers Club was acquiring products originally made overseas, it was also affected by inflationary pressures in places like China and the increasing cost of raw materials.

“Businesses like the Officers Club are unable to pass these prices on to consumers because the consumer has so much choice from rival shops and online, and there’s always another place to go for cheap products.