May we remind you of the top business and insolvency stories of the month?
Like the weather, insolvency statistics and news have been a bit of a law unto themselves in the last four weeks of Spring.
Even industry experts like ourselves know why figures aren’t as high as they would otherwise be but we’re still slightly surprised they remain so low officially.
One thing we do know for sure – Summer is going to bring a lot of change to the UK.
As well as hopefully improving weather, lockdown restrictions are due to finally end along with social distancing and physical trading restrictions.
Restrictions on winding up petitions, statutory demands and other creditor actions will also be ending so expect to see an increase in these areas.
But before we say a final goodbye to May and Spring 2021 – what are the interesting and important administration, business and insolvency stories that might have escaped your attention?
End of the affair for First Dates restaurant?
The restaurant group that owns The Refinery restaurant in Manchester where Channel 4’s First Dates has filmed since 2020 is entering a Company Voluntary Arrangement (CVA).
Drake and Morgan have 22 other sites across Manchester, Edinburgh and London although three, The Allegory and The Listing bars in London and The Refinery, would be expected to permanently close under the procedure.
Chief Executive and Founder Jillian MacLean said: “We started last year as a profitable and growing business and, in common with the rest of the hospitality industry, have been significantly affected by repeated lockdowns and tier restrictions.
The group hopes that the CVA will create some breathing space for the business to recover after “unprecedented and challenging” trading conditions.
National Training College closes without ever opening
Former interim managing director Martin York said: “Following a government review into the industry, there was no requirement to proceed with the college.
“It’s provision was dependent upon the UK government granting permission for the onshore oil and gas industry to extract shale gas via rock fracturing in order to proceed.
“The government subsequently imposed a moratorium on fracking which contributed to the industry decision that it no longer had a UK skills shortage and as such there was no requirement to proceed with the National College Onshore Oil and Gas.”
The college had received over £400,000 in research funding since its inception but had not drawn down on any of the £5 million in capital funds available to it during this time.
A spokesperson for the Department of Education said “Given the change of landscape, the DfE and Department for Business, Energy and Industrial Strategy felt it was unlikely that the industry would be seeking to train apprentices at the rate which was originally anticipated in the short term and were content with the college’s proposals to dissolve its operations.”
This is the second national college to be dissolved this year as the National College for Advanced Transport and Infrastructure (NCATI) otherwise known as the national college for HS2 was closed this way and its operations transferred to a new department under the University of Birmingham.
In February 2020, the National College for Creative Industries (NCCI) dissolved itself and transferred its courses to South Essex College.
Doorstep lending no longer proves Provident
After 141 years, Provident Financial are closing their doorstep lending business with an approx. 2,100 positions at risk as a result.
The company hopes to sell the operation but could ultimately wind down the business which saw its losses increase to £75 million in 2020 up from £21 million the previous year.
The doorstep lending business was originally started in 1880 by Joshua Waddilove, who first had the idea of setting up a scheme for poor residents of Bradford to pay for clothing using vouchers that were then paid back in instalments.
The business has recently defended several mis-selling complaints from customers and claims management companies as well as facing a regulatory investigation from the Financial Conduct Authority into affordability checks for borrowers and several other issues.
Malcolm Le May, Provident’s Chief Executive, said: “In light of the changing industry and regulatory dynamics in the home credit sector, as well as shifting customer preferences, it is with deepest regret that we have decided to withdraw from the home credit market and we managed to either place the business into managed runoff or consider a disposal.”
Pandemic forces Sassoon Academy to make cuts
Sassoon Academy, one of the most recogniseable names in hairdressing, is to appoint administrators and pursue options including restructuring or a potential outright sale of the business.
The impact of Covid-19 was tremendous for the hair and beauty industry so the Sassoon Academy was forced to submit a notice to the High Court announcing that administrators would be appointed.
Haircare Limited is the parent company that operates both the Sassoon Salon and Academy brands and it is only the latter that is currently affected by the decision.
Vidal Sassoon opened his first salon on Bond Street in 1954 becoming world famous for his pioneering bob cut in the 1960s.
The academy was created to provide practical hairdresser education with the best prospects being able to transition to the salons when they completed their training.
The founder sold his interest in 1980 and the business was acquired by US hair care company Regis in the early 2000s.
Pladis, the parent company of McVities biscuits, announced that they would be closing their historic factory in Tollcross, Glasgow putting 468 positions at risk of redundancy.
The factory has been producing such household names as Digestives, Hobnobs and Rich Tea for over 100 years.
David Murray, Managing Director of Pladis, said: “We know this news will be difficult for our colleagues at Tollcross, our priority now is to provide them with the support they need during the consultation process.
“Pladis is home to some of Britain’s best loved brands which have been part of the fabric of our society for nearly 200 years.
“In order to protect them for generations to come, we must take steps to address excess capacity in the UK.
“This overcapacity limits our ability to make the right investments in future capabilities to meet the very big changes in our industry.”
Midlands Automobile engineer liquidated
Coventry based engineering company Penso, who previously worked with both Jaguar Land Rover and Mercedes models has gone into liquidation with 100 staff being made redundant as a result.
David Roche, Managing Director of Penso, said it was with great sadness that Penso was to be liquidated.
Former winners of the Midlands Manufacturer of the Year award as recently as 2015, Mr Roche continued: “At the beginning of last year, the impact of the global pandemic saw the immediate cessation of demand for all of the principal activities of the group.
“Automotive OEMs cancelled new vehicle developments, the aerospace industry cancelled all new aeroplane production and the demand for new taxis dropped to zero, as a result of lockdowns and travel restrictions.”
The company responded to the downturn by bringing to market the lightweight Pod vehicle for the home delivery market but the global semiconductor shortage that led to a slowdown in automotive manufacture was a further blow.
Mr Roche continued: “As a result of this, a number of OEMs stopped production which had a direct impact on the ability of the group to generate Pod sales. The additional financial requirements caused by the semiconductor shortage meant that significant additional cash would be required to secure our future.
“Therefore with no immediate alternative funding available, we have no option other than for the group to enter insolvency proceedings. This decision has not been taken lightly. The board of directors have tried our very best to keep the business trading and all alternatives to liquidating the business had been taken into great consideration.”
No whisky galore for Alexander Inglis
One of the UK’s leading grain suppliers, Alexander Inglis and Son, has entered administration.
The business has 40 employees across five grain stores in Scotland and a regular turnover above £100 million supplying essential grain to the whisky and distilling industries across the UK and beyond.
The 71 year old business also supplied cereal, barley seed and fertiliser but said that they had suffered from weaker trading in recent months following a poor harvest in 2020 and a contraction of demand caused by the pandemic.
A statement from the board of directors said: “The board determined that the best course of action was to wind the business down to maximise value to creditors.”
This will involve marketing the existing grain stores, plant and equipment for sale along with transferring to stock held in stores.
Luxury fashion brand Amanda Wakeley, best known for bridal and occasion wear, has announced that it is entering administration.
The company was able to continue trading during the pandemic through its online store despite its flagship Mayfair store and other concessions being closed throughout lockdown.
Demand for wedding and online wear collapsed in the previous 12 months as events were mainly cancelled due to various restrictions.
The business sought additional investment but was unable to secure any appointed administrators to proceed with marketing the business’s assets for sale.
Founder and Creative Director Amanda Wakeley who founded the brand in 1990 said: “During the pre-administration phase, the company’s staff worked tirelessly with us to maximise sales and mitigate the impact of insolvency on the company’s creditors.”
Currys returns, many brands depart
Dixons Carphone have announced a rebrand that will see all of their disparate brands brought under the Currys banner.
All Currys PC World, Carphone Warehouse, Team Knowhow and Dixons Carphone stores in UK and Ireland will transition to Currys by October along with a relaunched website.
The overall name will change to Currys plc on the London Stockmarket after the AGM in September.
Alex Baldock, Chief Executive of Dixons Carphone, said: “The rebrand is a “no-brainer”.
“It’s the best of the old and the best of the new. Since Henry Curry first started helping everyone enjoy the amazing technology of his day – the bicycle – in 1884, Currys has been the best-known and most trusted brand in tech.
“We’ve worked hard to become one joined-up business and becoming Currys reflects and accelerates that. The move will make it easier for customers, who can turn to Currys for all their tech needs.”
There will be no store closures or redundancies as a result of the name change and rebrand although the business had already announced plans to close their 35 Dixons Travel airport stores.
This is in addition to closing their 531 standalone Carphone Warehouse stores in 2020 although they kept branded concessions within larger stores.
While personally it might feel like we’re at the cusp of a big change – in society and behaviour – what if professionally your business is stuck?
Or you can’t see a way for your company to be agile enough to take advantage of the coming wave of freedoms and spending that will accompany it?
Get in touch with us today before you spend another moment worrying.
We offer a free, initial consultation for any business owner or director who can’t see the way forward or isn’t sure what their next move should be.
Once we get a better idea of your situation, one of our expert advisors will be able to narrow down your options and help you focus on what you can and should be able to achieve.