CARAVAN and motorhome firm Discover Leisure – with three main dealerships in the region – has closed two thirds of its branches and reported significant losses.

Interim results for the firm, which owns the former Barrons dealership in Darlington, employing 66 staff, showed losses before tax for the six months to March 1 of £9.5m.

The firm, which owned 16 branches across England and Wales, is to become a “leaner group” focusing on five of its larger sites, including Darlington, York and Birtley, near Chester-le-Street.

Along with Chorley, in Lancashire, and Delamere, in Cheshire, the five branches accounted for 60 per cent of the group’s revenues in the six months to March 1.

Yesterday, it confirmed that as part of a restructuring programme, it had shut seven outlets already, with a further three to close yesterday.

An outlet in Cardiff closed last year.

Seven of the closed properties are freehold, and will be sold.

Discover said the increase in losses, from £1.8m last year, was a consequence of a 39 per cent reduction in the market for new tourers and motor homes in the period and the need to liquidate excess stocks to generate cash in an oversupplied market.

Trevor Parker, chief executive of Discover Leisure, said: “Discover will continue trading through our five northern premier retail outlets and via our online shop, including our Darlington site at Burtree Gate that has enjoyed a tremendous start to our busy season.

“Our team at Darlington are very hard working and we look forward to continued success at this branch.”

Mr Parker said: “While we are currently enjoying a positive trading performance at the start of the high season, external pressures are such that certain areas of our business were not geared for growth or indeed survival and, as such, put the entire company at risk.

“National Caravan Council statistics continue to report that the overall market is significantly reducing year on year and, as a result, simply cannot sustain the current level of retail outlets.

“Store closures and redundancies are always regrettable, but this bold, pro-active action gives stability to our company and puts us in a better position to ride out the current recession.”

As part of plans for refinancing, the company is pursuing a company voluntary arrangement, a formal procedure under the Insolvency Act 1986, with the unsecured creditors of Signlease, a wholly-owned subsidiary of Discover, including HMRC.

The group has also agreed principal terms with both Royal Bank of Scotland and Bank of Scotland for revised facilities, including an eightyear term loan of £8m secured against the five remaining retail properties.