Scores of upholstery workers in Bradford face an uncertain future after learning their employers had "run out of cash".

About 100 staff at Stag Group Upholstery were told that their owners, Stag Furniture, had been placed into the hands of receivers.

The operation, based at the Euroway Trading Estate, is the upholstery division of the business which employs a further 250 staff in Scunthorpe.

The operation had formerly been owned by Bradford's Spring Ram firm which sold it to concentrate on its kitchen and bathroom construction.

Stag called in administrators KPMG in a bid to carry on its operations while attempting to secure a sale or rescue package.

A KPMG spokesman said Stag had been subject to a management buy-out in 1999 since when the company suffered losses due to high borrowings and the financing of a major restructuring programme.

The firm moved from its previous base in Nottingham to Scunthorpe and cut 150 of its 400-strong workforce.

Despite lay-offs in May, redundancy payments have not been made.

KPMG said it was helping these Nottingham workers process their payments.

Allan Graham, corporate recovery partner at KPMG, said: "The company has run out of cash following the recent heavy restructuring.

"Potential buyers will recognise the Stag name has a strong brand value and, despite the company having made losses, a recent restructuring of the business has reduced the cost base to a level where a profitable future is possible."

He added: "We intend to continue to trade the business with the view of offering it for sale and investigating whether the company can continue operating through the administration/ company voluntary arrangement.

"The recent investments made by the business, including the modern factory facilities at Scunthorpe, have positioned the operation to run more efficiently.