Around 60 jobs are to go after Findel, the home shopping and educational supplies group, said it was closing its loss-making Cotswold Company and Letterbox brands.

Findel, which employs around 3,500 people, said it had decided that both businesses would be discontinued with immediate effect. Cotswold Company is based in Middleton, Manchester while Letterbox is based in Truro, Cornwall.

The company is also to close Findel Direct, the central administration functions of their cash-with-order businesses, which is to be incorporated into its existing home shopping business.

Cotswold Company, a bastion of middle England and a regular advertiser in the colour supplements, specialises in home furnishings, furniture and kitchenware.

It was bought by Findel for £100,000 in February 2007 after the business was put into administration by its former owners — even though, at the time, it had enjoyed business in the previous 12 months from more than 200,000 customers.

Letterbox, a mail-order firm specialising in “imaginative traditional products for children”, was founded in Truro in 1987 by Deborah Kilmartin and John Williams. They collected £7 million when they sold out to Findel in June 2006.

Findel, whose other brands include Kleeneze, Kitbag, Confetti and I Want One Of Those, the online gadget shop, launched a review of the ongoing viability of the two businesses in February as it seeks to clear some £100 million worth of debts by 2011.

The company, based in Burley in Wharfedale, Yorkshire, will write off £9 million in respect of Cotswold and £8.6 million in respect of Letterbox in impairment charges.

Patrick Jolly, the company's chief executive, said: “This action is in line with our strategy of improving the cash performance of the business with the aim of helping to reduce debt. We remain confident of achieving our strategic cash generation plans by our target date of March 2011.”

Shares of Findel, which have lost a fifth of their value since the beginning of the year, rose by more than five per cent on news of the closures.

Kate Heseltine of broker Seymour Pierce said: “This is encouraging news for the group. Both brands, accounting for 3.7 per cent of revenue, are heavily loss-making and termination will have a positive impact on pre-tax profits going forward.

Ms Heseltine, who said the shares had been “oversold”, added: “The company will, in our view, remain within its covenants through careful debt management, significantly reduced customer recruitment and a cut in the 2009/10 dividend.”

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive