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Simpson Group has defended its decision to enter into a consultation with all 96 staff at newly acquired Realisis, claim­ing it was the only way to keep the business profitable.

The Newcastle-based large-format company began a 30-day consultation period on 24 November, but decisions as to where the cuts will take place and how many staff will be affected are not likely to be known until early next year.

Mark Simpson, chairman of Simpson Group, said: "Huge changes are happening throughout the print sector. Realisis was struggling to operate under its current model and job cuts are a necessary way to ensure the business survives and that some of the current staff keep their jobs.

"We are looking to minimise cuts where possible and there’s a chance that new roles will be created. It’s too early to comment on the number of cuts that will be made or which areas they are likely to come from, but we bought Realisis with the intention of maintaining its large-format capacity at the Heathrow site."

There is currently no union involvement in the consultation process. Realisis In-Store was bought from administrators UHY Hacker Young on 20 November, following the latter’s appointment on 14 November. Simpson Group made the move for the company to improve its links to London.

Administrator Andrew Andronikou said Realisis In-Store, formerly known as Realisis TSG, had experienced trading difficulties.

The deal was the second time the company had been bought in the past two years, after business consultancy group Realisis purchased point-of-sale specialist Terry Smith Group in July 2007 to form Realisis TSG.

Simpson last week hinted at European expansion plans for his company. He said a move into Europe was "a natural step".

The consultation with the 96 staff follows four redundancies made in August this year, after the loss of a contract with supermarket giant Sainsbury’s.

Simpson Group has a current turnover of £9m.

Simpson Group timeline:

June Prepares for job cuts after client Communisis loses its Sainsbury’s print management contract
August Announces five redundancies
20 November Buys Realisis In-Store out of administration
24 November Enters into consultation with all 96 staff at Realisis