What interesting news stories caught our eye this month?
While the cost of living crisis is playing out and the long expected rise in corporate insolvencies has finally arrived – it can be hard to keep up with all the other business and insolvency news that has happened this month and what other administration, CVA and liquidation stories you have missed this month.
Don’t worry – we’ve got you covered with this monthly summary.
Missguided
The online “fast fashion” specialist has gone into administration after being issued with a winding up petition by clothing supplier creditors.
It is understood that 80 posts have been made redundant with immediate effect as talks begin with other suppliers about buying the brand as part of a pre-pack administration.
The business intends to continue to trade while looking to complete a sale of the Manchester based business and its assets.
A spokesperson said: “The retail trading environment in the UK remains extremely challenging but Missguided has generated a high level of interest already from a number of strategic buyers.”
The ramifications of Missguided’s difficulties are already being felt further down the supply chain. Several suppliers claim they haven’t been paid for months and others say they were asked for additional discounts on already agreed orders. This might push some of them closer to insolvency if money isn’t received or orders fulfilled.
BREAKING NEWS – Frasers Group, controlled by Mike Ashley, has bought Missguided in a £20 million deal struck overnight.
Frasers, which owns brands such as Sports Direct and House of Fraser announced it had acquired certain intellectual property of Missguided Ltd and other related firms Mennace Ltd and Missguided (IP) Ltd.
After the deal is completed, Missguided will continue to be operated by an administrator under a transitional agreement for about eight weeks, before it becomes a standalone business within the Frasers Group.
Michael Murray, the chief executive of Frasers Group, said: “We are delighted to secure a long-term future for Missguided, which will benefit from the strength and scale of Frasers Group’s platform and our operational excellence. Missguided’s digital-first approach to the latest trends in women’s fashion will bring additional expertise to the wider Frasers Group.”
Amanda Wakeley
Another fashion name that might disappear is Amanda Wakeley.
After being in administration for a year and with no buyers forthcoming and all available avenues exhausted, the luxury fashion brand will be liquidated.
High profile former customers included the late Princess Diana and Meghan Markle but the pandemic and subsequent poor sales both online and at its premium Mayfair retail store means that the administrators have now filed a notice with Companies House that they will be moving forward to a creditors voluntary liquidation which will see the business finally closed.
McColls
The retail group with 1,000 shops and newsagents employing 16,000 staff went into administration earlier this month leading to the suspension of its shares.
A statement from directors said “in order to protect creditors, preserve the future of the business and to protect the interests of employees, the board was regrettably left with no choice other than to place the company into administration.”
Prior to the decision, the group was in discussions to raise additional funding but the statement continued: “The lenders made clear that they were not satisfied that such discussions would reach an outcome acceptable to them.”
Several bidders showed interest before Morrisons made a final offer to buy the group out of pre-pack administration keeping all stores and employees. This was the preferred method after creditors declined a request to restructure McColl’s debt.
Morrisons already had an existing supply agreement with McColl’s and had hoped to buy the business before it went into administration. David Potts, chief executive said: “Although we are disappointed that the business was put into administration, we believe this is a good outcome for McColl’s and all its stakeholders. This transaction offers stability and continuity for the McColl’s business.”
As part of the deal, Morrisons agreed to waive £150 million it was owed by McColl’s that allowed administrators to distribute this money to other unsecured creditors.
The English Whisky Co
Oakvilla, a company that ran the restaurant at the English Whisky Co distillery in Roundham, Norfolk and produced their own gin has closed the business after becoming insolvent.
Andrew Nelstrop, managing director of the English Whisky Co, which is unaffected by the decision, said: “We had been very excited to see our bistro building leased to Oakvilla.
“Sadly global events and personal issues appear to have stopped them succeeding in their endeavours. We were surprised to be informed of their insolvency with the news that they would be leaving with immediate effect. Our hearts go out to their staff who had worked hard to make it a success and their suppliers.”
Quinto Crane and Plant Hire
50 positions have been lost as Quinto Crane and Plant Hire in Norwich, first founded in 1966 and one of the oldest in the UK, went into administration.
A spokesperson said: “The directors have made the difficult decision to cease trading with immediate effect.
“Like many businesses in the construction industry, Quinto has suffered from adverse economic headwinds. Brexit, the lockdowns and the recent spike in diesel prices have all come together to erode what were already tight margins.
“The market is extremely challenging for crane and plant hire businesses, but Quinto has a long-standing reputation and presence, which makes us hopeful of finding a buyer for the business as a whole or its assets”.
Credit Unions
The City of Plymouth Credit Union has gone into administration after ceasing trading and an administrator has been appointed by the High Court.
The Financial Services Compensation Scheme (FSCS) declared the credit union in default which meant that credit union members and savers were entitled to receive their deposits back automatically up to a limit of £85,000 per individual.
The credit union was first set up in 1997 and merged with another Plymouth based credit union in 2015.
Additionally the North East Warrington Credit Union (NEWCU) has entered voluntary liquidation after 25 years of serving the community. NEWCU was also covered by the FSCS so no savers will be out of pocket as a result.
A statement from the board of directors said: “We are very sad to announce the closure of NEWCU which has served the community since 1994.
“The loss of the credit union to the local community is distressing for residents who have come to rely on the services provided by the dedicated volunteers, who have worked tirelessly to keep the credit union open.”
A third – the Rainbow Saver Anglia Credit Union – has also gone into administration this month and stopped trading. As it is a financial cooperative owned by its members it is regulated by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).
Bleiker’s Smoke House
Yorkshire based Salmon smoker Bleiker’s Smoke House has gone into administration.
The company had been the main supplier for Aldi’s “Specially Selected” smoked salmon range which provided between 50-70% of the company’s turnover but the contract was cancelled in April.
A buyer or new investment was sought to maintain the remaining contracts but this was unsuccessful, so the business was placed into administration with the company ceasing trading immediately and the remaining staff being made redundant.
A spokesperson said: “Bleiker’s was a family operation with a track record of supporting both major and independent retailers. The loss of a significant contract left the business in a difficult financial position which regrettably meant it was no longer able to continue trading.”
Bower & Child
A 140-year-old Huddersfield cooker installation and maintenance business has ceased trading with the loss of eight positions.
Bower & Child saw the pandemic have a significant impact on their business as lockdowns impacted suppliers’ delivery schedules in widespread supply chain and logistic issues which saw the company’s cash flow and turnover severely reduced.
The directors said: “It is with very heavy hearts we have had to accept that Bower & Child could not continue trading.
“The unfortunate events of the last two years have finally taken their toll and eroded all our reserves, meaning the business can no longer sustain its viability.
“We have followed the guidance given to us by our advisers and tried our best to minimise the impact on our valued customers. It is a tragedy that such a long standing business has had to cease trading in the shadow of these unprecedented times.”
Big Dog Books
The owner of two independent comic book stores in Perth and Dundee has sadly had to close their doors for the last time this month. Owner Stuart Kane opened his first outlet with redundancy money in 2016 and opened a second branch in March 2020 – the week before the Covid-19 lockdown began.
Mr Kane said that continuing Covid interruptions, shipping delays, soaring costs, physical products moving to digital platforms, the rising cost of living and companies that once supported local games stores moving to direct sales had made staying open impossible.
“Covid blew the world apart and our Dundee shop was mothballed for six months. When things did reopen there was a huge reaction in the opening hours then we went into lockdown again and were shut for another six months.
“Marvel and DC now offer apps so you can pay £4 a comic in here or pay £40 a year to access every Marvel comic ever made.
“The global shipping supply also collapsed. Last year getting products into the UK was almost impossible as our products are all from outside the UK. We have had stock lost at customs with a boat leaving Brussels but the items somehow get lost along the way.
“We had Christmas merchandise that arrived in April and is no good to us as you can’t return it.”
He thinks there is a bleak future for the industry. “Colleagues up and down the country are saying the same thing as me. Within one of two years there will only be a handful of stores like this left in the UK.”
Testerworld
Three of the UK’s biggest chemical companies went into administration this month with the immediate loss of over 1,000 jobs.
Testerworld had facilities in Newcastle upon Tyne while Doncaster Pharmaceuticals, Crosspharma and Eclipse, all part of the Converse Pharma Group, have all closed as the main business went into administration.
Last year the Medicines and Healthcare products Regulatory Agency (MHRA) suspended Testerworld’s operating licence due to “customer and supplier validation and control protocols” requiring the mothballing of the operating for six weeks before restarting.
A statement from the business read “Pharmaceutical distributors and wholesalers form an important link between drug manufacturers and independent pharmacies and their end customers. It’s a complex chain which means we’ll be working closely with the relevant regulators, the management team and the group’s secured lenders to mitigate the impact on the pharmaceutical supply chain.
“The immediate objective is to conduct an orderly wind down of the trading operations with the aim being to maximise the return for creditors.”
Urban Splash
160 workers have been made redundant after the Urban Splash factory in Derbyshire closes following the failure of a joint venture – House – the company was involved with.
The business is now in administration with the collapse of the joint venture being blamed as the main cause by administrators who are trying to find a buyer for the whole of the business or its component parts.
A statement from the company said: “House is a joint venture and the administrators will oversee completion and sale strategies for the company’s developments. Additionally, the appointment followed various operational issues relating to the factory which have impacted the wider group.
“We would like to thank all employees and other key stakeholders for their continued support and will now look to stabilise the US House Group by providing a platform to complete certain developments and explore sale options for the factory and the other development sites.”
Dickinsons Plumbing and Heating
30 staff have lost their positions at Dickinson’s Plumbing and Heating – one of the largest plumbing and heating contractors in Yorkshire, which has ceased to trade this month.
The business was unable to meet its ongoing financial obligations due to rising cost pressures on its cash flow.
The 20 year old company worked mainly for volume house builders like Bellway and Vistry in the region.
Administrators have been able to sell the renewable energy division of the company, which provides ground source installation to house builders and housing associations to SRM Renewables – an installer of ground, air, biomass and solar energy products.
A spokesperson said: “Companies across the construction sector are feeling the impact of inflation as rising costs affect their profitability and all-important cash flow.
“Despite a marketing process, there was no interest in the rest of the business for sale so sadly all remaining positions have been made redundant.”
Best Western
The Charnock Richard hotel, A Best Western brand in Lancashire has entered liquidation.
The hotel was set near to the former Camelot attraction in Chorley and the owners had sought to pivot the business from public guests to allowing it to be used as accommodation for people waiting for decisions on their asylum applications.
A letter sent to creditors said: “Due to the Covid-19 pandemic, the company was unable to trade due to the restrictions put in place. Even when the business was able to trade, substantial trading restrictions were still in place and the company was unable to trade to full capacity and therefore began with cash flow problems.
“The company secured a bounce back loan from the government funding scheme which was utilised to pay the expenses of the company. This removed some pressure in the short term, but unfortunately, this was not sufficient to support the company’s cash flow and ongoing cost.”
Whirli
Toy subscription service Whirli has gone into administration which will affect its 10,500 customers.
The start-up began in 2018 and sold various subscription packages that gave customers tokens to borrow toys and swap them on return with the option to keep them for up to eight months.
Due to a lack of funding, the business has gone into administration to see if it can restructure itself and reemerge.
ITE UK
The UK arm of Belgian tools supplier ITE has closed and been put into voluntary liquidation by its owners.
First launched in 1989 in Thatcham, Berkshire, the ownership group concluded that “the company cannot by reason of its liabilities continue its business”.
All customers have been informed that the services of the UK company have been integrated into the Belgian business and an online auction of assets will take place in the near future.
Raleigh International
The international volunteering charity Raleigh International Trust has gone into voluntary liquidation with the immediate loss of 47 positions.
The charity sector has been hit particularly hard during the pandemic and subsequent lockdowns and issued a statement saying “government cuts to the foreign aid budget and the impact of Covid-19 had had an irreversible impact on its finances.
The statement said the closure was being made “with enormous sadness” and “despite our team’s intensive fundraising efforts, continuous hard work and ongoing cost-saving measures in the face of increased economic pressures, we have been advised that the charity is insolvent.
“Regrettably, the combination of dramatically reduced funding and foreign aid, plus the legacy of two year of delayed or cancelled programmes, due to the Covid-19 global pandemic and its associated overseas travel restrictions, have had an irreversible impact.”
“The team are extremely proud of the positive impact we have made over the years to help communities across the world, and would like to take this opportunity to thank everyone – from volunteers and staff to communities, project partners and funders – who have supported our work.”
Corporate insolvencies continue to rise to levels greater than before the pandemic and with the coming summertime squeeze on SMEs things might get worse before they get better – if they ever do.
This is why it’s the best time right now to look for the changes that could make the difference between a business surviving or not.
Once our advisors have a clearer picture of your business’s unique situation then they can provide a tailored range of possible solutions for you to consider and choose depending on your goals and objectives.
But only if you get in touch and arrange a call first