The bakery sector was left reeling this week after two well-known chains - Peters Bakery and Bakery Products - collapsed into administration.

Peters Bakery has 58 stores across the north east, as well as a 50,000 sq ft factory in Durham. It had a turnover of more than £12m.

Administrators KPMG said the business had been hit by the “challenging retail environment on the high street, exacerbated by rising commodity and energy prices squeezing margins”. Redundancies are now anticipated.

“We will continue to trade the bakery, which has a state-of-the-art production facility, a 100-strong product range and a loyal workforce, while seeking a buyer, and will be assessing and reviewing all aspects of the business,” said joint administrator and KPMG northern head of restructuring Mark Firmin.

Bakery Products, which was formed after the company behind the short-lived Haldanes and Ugo supermarket chains bought part of Woodhead Bakery out of administration in April last year, collapsed last Friday.

Bakery Products had 11 Woodhead stores in the North of England and a factory in Scarborough and was best known for its Wedge Pie, which was listed in Morrisons. The stores closed last weekend.

Tindale & Stanton, which was bought out of administration by Bakery Products in November last year, has also been put into administration.

Administrators the P&A Partnership, which also sold both businesses to Bakery Products, were unable to give any further information.