Is there a cure for summertime business blues? The July insolvency news round up
Cleveland Bridge, builders of such iconic structures as the Sydney Harbour Bridge, the Tyne Bridge in Newcastle and the arch at the new Wembley Stadium, has gone into administration.
The company is part of the Al Rushaid Group based in Saudi Arabia, and has been marketed for sale by administrators while staff continue to complete ongoing projects with others remaining on furlough as part of the Coronavirus Jobs Retention Scheme.
The company employs 221 at its Darlington headquarters along with an engineering site in Newport, South Wales and a further 98 contractors. There are also many more companies in the supply chain that will be anxiously awaiting news
A spokesperson for the administrators said: “Cleveland Bridge UK has been a flagbearer for cutting edge British engineering for more than a century.
“But no business is immune to the far reaching impact of the pandemic, which has delayed major infrastructure projects around the world and put significant financial pressure on the teams behind them.
“CBUK is a business with a proud history and a formidable track record of engineering excellence. It also has great potential.”
Kapex Construction and Nobles
Previously profitable Newcastle contractor Kapex Construction Limited has also entered administration in July.
According to their latest accounts filed at Companies House in March 2020, the business had assets of £4.1 million and liabilities of £3.6 million.
There were £433,020 profits on a turnover of £11.6 million and was understood to have an order book of £40 million. This was an increase in profits from the previous year.
Founded in 2016 as part of the Morton Group, Kapex was largely involved in residential construction contracts in the North East, working on projects including commercial building refurbishments and student accomodation.
Work at the various sites the company was engaged with has stopped with staff being sent home while administrators look for a solution.
Liverpool-based Nobles Construction has also gone into administration following tightening trading conditions.
The business applied for but was turned down for a Coronavirus Business Interruption Loan (CBILS) last year which would have been used to resume trading and bring furloughed staff back into work.
Their last project was a large housing development in Warrington with no work being completed from February 2021 as Nobles and the developer were in dispute.
WRW, one of the leading construction firms in Wales with three offices in Llanelli, Cardiff and Bristol, have entered administration after coming under “significant financial stress”.
A statement issued by the business said: “Despite a significant order book of over £60m to be delivered within the upcoming 12 months, a supportive lender, fantastic staff and prospects, regrettably, owing to a series of events the last week, including an unfavourable adjudication outcome, the business was put under significant financial stress.
“The directors have worked tirelessly with their advisors and funders to look for solutions for the business to remain viable.
“Unfortunately, it has been regrettably determined that no viable options remain, and administration is the best course of action to preserve value for stakeholders and creditors. As a result of this, the directors are in the process of placing the company into administration.”
The business has financing secured against property and other assets and despite having several public and private sector clients and a strong supply chain, administrators hope to be able to secure returns for creditors.
Glasgow-based property developer Titan Homes has gone into administration after an extended period of financial difficulties.
The flagship development they are working on is Meadow Road in Glasgow where 45 luxury apartments are being constructed which will now be taken over by a secured lender who will look for a new partner to complete the project either in partnership or as a solo project.
Victoria’s Secret and Arcadia
The UK arm of lingerie store Victoria’s Secret has moved out of administration and gone into liquidation.
The business entered administration in June 2020 after the Covid-19 lockdown became insurmountable.
The administrators asked a judge at the Insolvency and Companies Court for permission as they would liquidate what assets remain and use them to pay dividends to remaining creditors.
Another famous name in British retail – Arcadia – has also appointed liquidators to close the final remnants of the business that collapsed in November 2020.
Their main task will be to repay creditors including HMRC which is owed a “substantial VAT liability” by several of the companies within the Arcadia group.
A spokesperson said: “The liquidation of the Arcadia companies is a large and complex undertaking. Over the coming months the aim is to repay as much as possible of the group’s outstanding debts.”
Some of the names that will be disappearing for the final time include Burton, Dorothy Perkins and Evans.
Gap and H&M
American casual clothing powerhouse Gap announced it was closing all 81 of its physical stores in the UK and Ireland with 1,000 positions being lost as a result.
The closure program is expected to be completed by the end of September 2021 but would continue as an online only business.
H&M have also announced that while their profits have increased over a 12 month period and they would open 100 new stores, they would be closing 350 for a net loss of 250 locations.
Marks and Spencer announced that it was immediately closing all of its physical 29 bank branches with all current accounts being closed at the end of August 2021.
The company said it hoped to redeploy workers wherever possible and confirmed that none of the travel money bureaux branches would be affected.
A spokesperson confirmed that the closures were a result of the surge in online banking and would instead focus on credit cards, insurance, savings and loan products.
Dutch retailer Hema announced it would close all six of its UK branches as it looks to focus more on its core markets in the Netherlands, Belgium and France.
The company launched in the UK in 2014 planning to grow into an international brand but chief executive Saskia Egas Reparaz said that it was unfortunate that the company had to let staff go but it had never managed to build a solid position in the market.
Liverpool School of English decimated by pandemic
The Liverpool School of English which prior to the pandemic taught 5,000 students a year from 80 countries has gone into voluntary liquidation.
Founded in 1999, the school has provided tuition for over 50,000 students in its 20 year life.
As international travel was brought to a halt in 2020 and remains extremely restricted in 2021, the immediate drop in applications and enrollments was catastrophic for the business.
The school looked at offering online classes but interest was insufficient to maintain the school as a viable business. 34 positions will be lost with the closure.
A spokesperson said: “Since March 2020, the company has been adversely affected as a result of the global response to the pandemic. These measures made the business unsustainable after so many years of success.
“The directors have explored every single avenue to keep the business going since March 2020 but ultimately the challenges presented to them by lockdown restrictions and a decision by their insurance company not to pay out on business interruption and infectious disease claims were too great to overcome.
“This is an example of a previously highly successful business being devastated by the global response to the pandemic and, regretfully, it certainly won’t be the last.”
JTF – a midlands based discount warehouse chain – has gone into administration with the closure of over 12 branches and warehouses and the probable loss of 500 positions.
The 40-year-old company issued a statement expressing disappointment and stressing that the pandemic had played a significant role in the downturn with the forced closure of stores wiping out fireworks and Christmas sales which were “two of the largest seasonal items for JTF”.
JTF Chairman Arthur Harris, who bought the chain in January 2020, said: “We believed we had secured a sale of the business but unfortunately the buyer pulled out at the last minute leaving nowhere to go.
“JTF had a fabulous team. I believed I had done everything possible to turn it around, taking the business back into profit within four months but just hadn’t factored Covid into the scenario.”
JTF continues to seek a buyer but in the meantime staff will be able to apply for redundancy.
The majority of 2021 has passed and while it’s still the holiday season, many think things are also taking a rest but this isn’t true.
As expenses continue to mount, the Coronavirus Job Retention Scheme furlough ends next month, CBILS and bounce back loan repayments continue to come due, defaults rise and the ban on creditor actions such as winding up petitions will be lifted.
The time to get advice and make decisions that could change the fortunes of your business is beginning to eke away.
Get in touch with us today for a free initial consultation and we can help you put plans in place that will have an effect before the majority of businesses understand that time has begun to run out.