* Says Deloitte appointed administrators
* Says was unable to secure additional funds
* Deloitte says stores will continue to trade
* Deloitte "hopeful" of going concern sale
* Says 20,000 customers awaiting deliveries
(Recasts, adds comments from Deloitte partner, writes through)
By James Davey
LONDON, Jan 12 (Reuters) - British furniture retailer Land of Leather Holdings Plc confirmed it had gone into administration on Monday, becoming the latest victim of the UK retail downturn.
The company said Deloitte had been appointed administrators with immediate effect, putting at risk 850 jobs at its 109 stores in the UK and Ireland and 200 in its head office.
"The company has been unable to secure additional funds due to the exceptionally difficult trading conditions and the lack of liquidity in the banking system," the company said.
"In addition, the board has pursued other strategic options including the sale of the company."
Earlier on Monday, shares in the retailer were suspended at 2.95 pence, having collapsed from a peak of about 2,920p in early 2007. Over the past year the group has issued three profit warnings.
Land of Leather has been hard hit by the slowdown in consumer spending, paralysis in the housing market and soaring unemployment -- factors which have already resulted in a spate of retail failures including Woolworths, which closed its doors earlier this month with the loss of 27,000 jobs.
VERY DIFFICULT PLACE
Land of Leather said last month total sales orders slumped 47 percent in the three months to Nov. 2 and on Monday said results from a January sale had been "very disappointing".
Deloitte said in a statement the business would trade as normal while it continued discussions with interested parties, with the aim to sell the business as a going concern.
"There are talks going on ... and we are hopeful that we can achieve a sale," Lee Manning, joint administrator and Deloitte partner, told reporters. "But at this stage we don't know when or for how much."
He said there was interest from less than 10 serious players including a mixture of trade and private equity suitors, adding it was more likely than not that some would stores be sold with the balance closing.
"Retail is in a very difficult place at the moment and you wouldn't expect to have many people lining up, especially (for) something as specialist as this business is," Manning added.
Deloitte said it was working with management to protect the interests of 20,000 customers who have paid deposits on furniture orders. All customers who paid a deposit by credit card or Visa debit card, or by any means since Dec. 26, were fully protected.
Any customers who paid a deposit in cash or by a non-Visa debit card before Dec. 26 would be offered a discount on other stock if their original order cannot be fulfilled.
"We are hopeful that if the business can be sold as a going concern, that all orders would be taken over but ... we can't impose that on any purchaser," said Manning.
The company held brief talks with potential bidders in December but they came to nothing.
Media reports said Hilco, a turnaround specialist, and private equity firm Sun Capital, had made approaches. Sun Capital purchased the trading arm of ScS Upholstery last year after it went into administration. (Editing by Mark Potter and David Holmes) ($1=.6687 Pound)