ONE of the North-East's biggest furniture companies has gone into administration after falling victim to a downturn in consumer spending, it emerged last night.

Stag Furniture, which employs more than 550 people in the region, appointed PricewaterhouseCoopers (PwC) as administrators on Tuesday.

Stag, based at the North Hylton Road Trading Estate, in Southwick, Sunderland, is the UK's largest manufacturer and supplier of assembled cabinet furniture.

The business, which sells through mail order companies and independent retailers, is believed to have suffered significant losses as a result of the severe retail downturn in the UK over the past 12 months.

Joint administrators Ian Green and Edward Klempka, of PwC, said the business was continuing to trade while they looked for a buyer and no redundancies had been made.

Mr Green said: "We recognise that Stag is a major employer in the area and will be doing all we can to preserve the business and jobs for employees.

"We are currently undertaking a full review of the business with a view to trading on while we seek a buyer.

"Clearly, for this to be possible, we will need the support and continued co-operation of customers, suppliers and employees."

Stag has been making furniture since 1971 and is one of Sunderland's biggest employers, with 556 workers.

Last June, the firm underwent a management buy-out from the Silentnight Group, led by managing director Phil Goodier and commercial director Shane Bissett.

At the time, it was reported that more than £1m had been ploughed into equipment at the factory after the company doubled its sales in the catalogue shopping market.

Last night Councillor Peter Wood, the Conservative leader on Sunderland City Council, said: "I am very sorry to hear the news.

"Stag is a major employer in the city.

"What we want is more jobs, not fewer jobs.

"Stag has got a very good reputation and I hope that somebody will come along and take over the company."

Last October, Sunderland-based DP Furniture Express went into administration, blaming its demise on the deteriorating retail market and a curb on consumer spending.

The firm, formerly known as Durham Pine, underwent a management buyout in November, led by former managing director John Hood.