ICONIC Toowoomba company Quality Desserts is under a cloud after parent company Cakes Galore went into voluntary administration.
Cakes Galore CEO Julian Lancaster-Smith said while the company was confident of trading through administration, increases in raw material costs and a downturn in sales had led to the financial difficulties.
"This is a sad day for Cakes Galore and for Toowoomba," he said.
"Over the past few months we have been battling various headwinds with increases in our raw material costs and decreases in our sales volumes from some key customers that have forced us into this current situation."
Mr Lancaster-Smith said the company was working closely with administrators SV Partners who remained hopeful it could continue trading in the future.
"The management team and I will be working closely with the administrators to determine the next steps but we are confident that we can trade our way out of the current situation and be back to normal trading condition in the short to medium term," he said.
Mr Lancaster-Smith said the company would work to "streamline our cost base and increase sales" in an effort to remain viable.
Administrator Terry van Velde from SV Partners said Cakes Galore's strong presence in supermarkets around the country indicated the company could trade through its financial difficulties.
"We will be working with the company to ensure that customers continue to receive their stock, suppliers are able to receive all future payments and staff are still employed where possible," he said.
"While it is still very early days, we are working with the director and the management team to ensure the company's business can continue to operate in the future."
Cakes Galore was founded 23 years ago and remains a family-run company.
It is understood to employ 40 full-time workers directly and more than 100 through its related companies.
Mr Lancaster-Smith did not return calls this afternoon.
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