What interesting stories happened last month?
The Harvest Moon has passed, marking the start of autumn and the arrival of the blood moon eclipse means we’re running out of events to hold back the official run up to Christmas.
A lot of people are suggesting that the UK adopts Thanksgiving as a holiday now – not out of any respect for history or native Americans but to have something in November to look forward to and be a bulwark against a six week yuletide.
If only the rest of us could be concerned with such froth when for a lot of businesses, the situation is far more serious, as you’ll see in our business and insolvency news summary for the last few weeks.
Wasps Rugby Union
WASPS Holding Limited has confirmed it has gone into administration and has immediately ceased trading.
The club’s 167 employees were left in tears after they were informed they were made redundant, this included all players and coaches from the men’s, women’s and netball team.
Wasps have been unable to repay the £35 million it owes to bondholders following their relocation to Coventry in 2014 and owe a further £2 million to His Majesty’s Revenue and Customs (HMRC).
A statement on behalf of Wasps’ administrator, who confirmed the Coventry Building Society Arena would continue to trade, said: “This is a dark day for English rugby, and we know this will be devastating news for every Wasps player and member of staff, past players, sponsors, and their thousands of supporters throughout the world, and anyone who has ever been involved with this great club.
“Our immediate focus is on supporting those who have lost their jobs this morning. This will be an incredibly challenging time for every individual, and we will be assisting them in making claims to the redundancy payments service. The board and many others across the club have worked tirelessly over the last few weeks to try and find a solution that would allow the club to move forward, and it is with great regret that there has been insufficient time to allow this to happen.
“However, we remain in ongoing discussions with interested parties and are confident that a deal will be secured that will allow Wasps to continue. We continue to engage closely with them as negotiations with interested parties continue. Of course, time remains of the essence, and we will be doing everything in our power to progress discussions with interested parties as quickly as possible, while fulfilling our statutory duties as administrators.”
British Steel
It has been reported that Scunthorpe based British Steel, have asked for urgent financial aid from the Government, meaning hundreds of jobs could be at risk.
British Steel said it is facing significant challenges because of economic slowdown, surging inflation and exceptionally high energy and carbon prices.
It has been reported that the Chinese owners have told ministers that without aid the company’s blast furnaces are unlikely to be operable.
A spokesperson said: “We are investing hundreds of millions of pounds in our long-term future. We welcome the recent announcement by the UK Government to reduce energy costs for businesses and remain in dialogue with officials to ensure we compete on a level playing field with our global competitors.”
Joules CVA
Joules, a UK-based clothing retailer, has confirmed the rumours of a CVA is an option they are considering exploring.
The lifestyle retailer said: “As previously announced, the group continues to assess its ongoing financing requirements, including a possible equity raise, to allow the company to strengthen its balance sheet and provide a strong platform to support the turnaround plan.
“Whilst this remains the board’s focus, the company also continues to consider a range of other potential options which may be available to it, where a CVA is one of a number of such alternatives, and notes it has not determined if such alternatives are required.
Joules was in advanced negotiations regarding a sale of 25% of the business to Next for £15 million, however, the fashion giant ended the talks late last month.
Its plan focuses on driving higher profitability through a better pricing and promotional strategy; focusing on more profitable product categories with shorter time to market; and optimising its channel mix.
Igloo Energy
Southampton-based Igloo Energy Supply was one of a string of smaller companies which ceased trading as the price of wholesale energy rose rapidly.
Administrators were appointed after the directors told the industry regulator last year that Igloo would be unable to pay its debts as they fell due. Its 179,000 customers were all transferred to one of the industry’s big names, E.ON.
The founders of the business said at the time the market was “no longer sustainable” for their company and confirmed that the business will now be placed into creditors’ voluntary liquidation.
Osaka Gas UK, which had first called on the company’s assets and submitted a claim for £17.8million, has been paid in full.
Lightbulb ES Limited, which was Igloo’s only shareholder – and had Igloo founders Matt Clemow and Henry Brown among its directors – has been paid £5.39m.
The company’s debts to unsecured trade creditors have previously been estimated at £45.36m.
The administrators’ report says: “Based on current estimates, we anticipate that unsecured creditors should receive a dividend. We have yet to determine the amount and timing of this due to uncertainty regarding asset realisations, cost of realisation, adjudication of claims and the outcome of the court directions hearing.”
Thirty-nine of Igloo’s staff were made redundant soon after administrators were appointed in October last year.
The remaining 187 were kept on to support the transfer of customers to E.ON before being given notice on December 22, 2021.
Eve Sleep
On a positive note, Bensons for Beds has bought Eve Sleep’s brand, website and intellectual property out of administration as it steps up its growth plan.
Despite Eve revealing its UK revenues plunged 18% last year in the first quarter, Benson said that they have seen the potential in the brand, which it said had “significant customer recognition”, particularly with younger shoppers, and would widen its appeal.
Bensons for Beds chief executive Nick Collard said: “Eve Sleep is a brand that we know resonates strongly with key customer groups and we’re looking forward to unlocking its full potential as it takes advantage of our scale and reach.
“What’s more, bringing in Eve Sleep alongside our own growing portfolio of high quality in-house brands will help us widen Bensons appeal to a broader set of customers.
“With the backing of our owner, Alteri Investors, this is another indication that we are delivering on our pledge to fulfil the promise of the Bensons for Beds brand itself – not just as a retailer of market leading proprietary brands, but with a distinctive and coherent set of owned brand sleep solutions for any customer, both digitally and through our stores.”
Skinners Brewery
Cornish brewery Skinner’s made an announcement on October 1st that it is going into administration.
Despite the sad news, it has been confirmed that The Old Ale House, described as the brewery’s own tap house, will not be affected and will remain open as it is not owned directly by the brewery.
Like many companies, Skinner’s has been struggling with rising costs and losing out on business during the pandemic. In 2021, it ran a crowdfunding campaign to raise funds, raising £80,000 in three days.
In a statement, the company said: “Steve Skinner, sole owner of Skinners brewery, is deeply saddened to announce that as of week commencing Monday 3rd October, Skinner’s Brewery will enter into administration.
“Our strong hope is that a buyer can be found, and that the brewery in some form will continue to be part of life in Cornwall for many years to come.
“We would like to take this opportunity to thank our staff, stockists, suppliers, the ‘Skinner’s Beer Tribe’ and the whole community for so many years of steadfast support. We hope to bring you further updates soon.”
Clements Retail
Leicester based manufacturing firm Clements Limited has entered into administration after financial losses.
The firm designed, manufactured and installed luxury retail interiors, as well as providing marketing, brand and logistical support to global manufacturers.
A representative said: “Creditors have been provided with the relevant information regarding the administration process, to enable them to partake in proceedings. We are in the process of dealing with all enquiries and working to assist the affected employees with processing their claims for statutory entitlements at this difficult time. We will strive to achieve the best outcome for everyone involved.”
Qualia Care
Qualia Care has gone into administration following the pending trial of their former director who has alleged links to unauthorised investment schemes in care homes in which investors appear to have lost at least £30m.
Robin Forster, Richard Tasker and Fortem Global are the subject of High Court proceedings by the Financial Conduct Authority. An 11-day trial is scheduled to start in April.
Forster resigned as a director of Qualia Care on September 21 this year.
A statement from the administrator, said: “There was an attempt to rescue QCL [Qualia Care Limited] outside of administration but it was discovered that large sums had been removed from its bank accounts just prior to our appointment.
“Attempts to recover those sums were partially successful but not in time to avoid administration.”
A spokesman for Healthcare Management Solutions said: “We are working closely with the administrator to manage the ten care homes operated by Qualia Care.
“Our focus is on ensuring that high quality care is delivered and that the people living in these homes are safe and happy. We will be shortly holding a series of meetings for relatives to explain the current position and provide reassurance that there are no plans to close these services.
“We understand this is also a worrying time for the staff who work in the homes and this news comes on top of the challenges brought on by the Covid pandemic. We would like to reassure them that their wellbeing is high on our list of priorities and that there are no plans for any job losses in the homes.”
Spirit.Ed Drinks
Spirit.ed, a UK based drinks company, formerly known as 31 Dover, has gone into administration after going through “a difficult trading period”.
The firms in question, DMD Operations and Vanquish Operations, owned online retail site Spirit.ed. They also ran subscription business The Gin Club, and drinks wholesalers Vanquish and On Stock.
A representative said: “Following a period of difficult trading conditions, the companies’ management had attempted to find a new strategic funder. Whilst we understand that negotiations were at a very developed stage, ultimately they were not successful.
“The joint administrators will therefore be aiming to realise the best possible value from the business and assets, in order to maximise the return to the creditors.
“Since our appointment we undertook a successful stock realisation strategy which is now substantially completed. We are in discussions with a number of interested parties in respect of the sale of the companies’ intellectual property including its brands.”
Lifeskills
LifeSkills Solutions Limited, a training provider based in Rotherham, Lowestoft and Basildon has been placed into administration.
Lifeskills currently works with around 470 students, providing post-16 education and training programmes and has centres located in and around London.
The company has suffered from an ongoing dispute with the Education and Skills Funding Agency/Department for Education which has affected funding and made the social enterprise unviable.
A spokesman for LifeSkills, said: “Over the last 20 years, LifeSkills has done some wonderful work and we are proud to have supported the learning of over 22,000 young people.
“While we have tried everything to save the company, this has not been possible and we are incredibly sad to be in this situation.”
Muller EV
Muller EV, which also trades under the name Anderson EV, supplies residential charging points for electric vehicles and has recently hired administrators.
Delays to supply chains across the car manufacturing industry have triggered widespread warnings about depressed sales of electric vehicles in recent months.
A spokesperson on their behalf said, “Companies up and down the automotive supply chain have been experiencing a myriad of issues over the past 12 to 18 months, and Andersen EV was unfortunately no different.
“We will be providing assistance to those employees who have been impacted by redundancy, and will also be seeking purchasers for the Company’s assets, including plant and machinery.”
Frost Burgers
Earlier this month administrators were appointed to Frost burger, which comes after the vegan chain stopped trading last month.
This has come as a shock to some as last year, its turnover was £515,811. The chain had also been voted as one of the top 50 burger places in the UK by Big 7 Travel.
A representative for Frost Burger, said: “Despite gaining an excellent reputation, Frost Burgers has become just one of the many businesses within the hospitality sector that have experienced financial distress. Restaurants in particular, are struggling to afford raw ingredients and many are struggling with their energy bills.
“The hospitality sector is also taking a huge hit from labour shortages as well as debts accrued over lockdowns, including bounce back loans. It is likely that more restaurants will find themselves in a similar position as we progress towards the end of 2022.”
Bliss Hotel
An administrator has been appointed over the companies that own and operate the 131-bedroom Bliss Hotel, which was recently put up for sale.
The hotel recently underwent £15m refurbishment and was put up for sale around the same time.
The building is located next to Sefton Council’s proposed £73m Marine Lake
Events Centre, which forms the backbone of the authority’s regeneration strategy.
Bliss Hotel offers a lounge bar, restaurant, roof garden, gym, conferencing and events space, as well as underground parking for 120 cars.
The adjoining 50,000 sq ft leisure block is also up for sale and has the potential to be converted to expand the hotel.
“We are continuing to trade the business as usual whilst we look for a buyer for the business as a going concern,” a representative said.
“At this time, we have no plans to make any changes to the team structure and we will be honouring all function bookings.”
Draper Ventilation
Draper Ventilation Limited (draperVENT) specialised in ventilation and cooling systems for livestock farming, however following the loss of a major contract it has to cease operations.
In July 2016, Draper Ventilation opened an Agri-tech Innovation Centre at Dorset Innovation Park, on Winfrith’s former atomic energy site.
The move was intended to create 20 jobs as well as safeguarding 18, and to increase group-wide turnover to more than £20m, all by 2025.
A spokesperson said: “Despite draperVENT securing recent investments, including the move to its new Agri-Tech Innovation Centre headquarters at Dorset Innovation Park in 2021, the loss of a major contract meant the ongoing business was unsustainable.
“The director made the extremely difficult decision to cease trading, which has unfortunately resulted in the redundancy of 18 members of staff.
“We have been working with the director of the business to wind up affairs during what has been a very challenging time for all involved.”
Corporate Solutions logistics
More than 200 members of staff have been made redundant at Corporate Solutions Logistics after it lost contracts and started to suffer problems related to rising fuel prices and other costs.
The Solihull-based firm operated from sites across the UK and specialised in transporting goods for the supermarket industry.
But administrators have been appointed to the company earlier this week shortly after it had ceased trading.
Corporate Solutions Logistics has suffered from financial difficulties after the loss of some long-standing contracts and continued pressure on its profitability due to the rise in fuel prices and other input costs.
The directors conducted an accelerated sale process to find a buyer for the business and bring in fresh investment but, with no viable offers, they were forced to close down.
A representative for Corporate Solutions Logistics said: “Like many other businesses in the logistics sector, Corporate Solutions has had to contend with a rapidly rising cost base, not least driven by high fuel prices, as well as weak economic growth and fierce competition over contracts.
“The business was unsustainable without any further investment and, with the business having ceased to trade, we will now move towards realising its assets. Regrettably, almost all roles at the business have been made redundant.
“We have a team providing support for impacted staff as they make claims to the Redundancy Payments Service during this difficult period.”
Businesses still have time to end the year strong – if they take decisions now
With the end of 2022 finally coming into view, many businesses are wondering if they will have enough juice in the tank to make it through to New Years Eve following another historically significant economic year.
We offer a free consultation to any director or business owner who’s worried about their immediate future.
One of our expert advisors will be able to let them know what options they have to make positive immediate changes as well as other short and medium term strategic moves to give their business a great chance of starting 2021 on the right foot.
The sooner they get in touch, the sooner they can start their own recovery story.