What's happened this week in the world of insolvency and administration?

You might be forgiven for thinking that there’s no other business or insolvency news happening at the moment.

 

With coverage of the Coronavirus pandemic and its response dominating the blogs, headlines and airwaves, It can certainly feel like it.

 

We’re going to keep a watching brief of all the other stories of interest in the sector that you might have missed or not kept abreast of and we’ll post them right here every Friday until things return to something resembling normal.


This week’s administration and insolvency news round-up

Brighthouse

 

 

 

 

 

 

Laura Ashley shutters 70 UK stores 

 

Despite ongoing attempts at a rescue package with lenders beginning to show progress, the iconic British brand Laura Ashley went into administration with the immediate closure of nearly half of its 150 UK stores.

 

Chief Executive Katherine Poulter admitted that the Coronavirus outbreak had an immediate and significant impact on trading and that “Laura Ashley can and should retain the place it deserves in the international retail landscape. Unfortunately, we will lose some brilliant people through no fault of their own.”

 

The lockdown came at the worst possible time for them as they saw year-on-year trading figures up 24% in the seven weeks leading up to March giving credence that the brand could have recovered. 

 

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Lights go out at BrightHouse

 

BrightHouse, the UK’s largest rent-to-own retailer, has entered into administration. 

 

The company was already struggling with compensation claims from customers who were struggling to keep up with the monthly repayments but closing all 240 stores as part of the Coronavirus restrictions saw management call in administrators. 

 

The company has 2,400 employees and approx. 200,000 existing customers who still owe outstanding amounts on the products they’ve bought from the company. 

 

Administrators have confirmed that customers should continue to make their repayments on the purchases as even with the company in administration, they could attract extra charges and damage their credit score if they fall behind. 

 

If they are suffering genuine hardship themselves then they may be eligible to approach the administrators and ask for a payment break.

 

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Arrivederci Carluccio

 

Italian restaurant chain Carluccio’s also appointed administrators this week after being called in by the board of directors. 

 

They said they made the decision after “a sustained period of challenging trading conditions which have been exacerbated by COVID-19 and the broader issues currently facing the UK’s retail and hospitality sector.”

 

The company faced significant cash flow pressures and was ultimately unable to meet their financial obligations as they fell due.

 

Administrators have several options including pursuing a whole or part sale of the business and its 73 outlets but have confirmed that they will look to access the government’s Coronavirus Job Retention Scheme to furlough the majority of the group’s 2000 employees in the meantime. 

 

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A Fistful of dollars not enough to save Chiquitos

 

Less than two weeks after The Restaurant Group caused a Mexican stand-off by warning investors that the Coronavirus pandemic would halve its sales for the first six months of 2020, the first casualty fell.

 

They announced that their Tex-Mex themed Chiquitos brand had entered administration and that 60 of its 81 locations would remain closed permanently. 

 

The group announced that they would embark on a series of closures of Chiquito’s and Frankie & Benny’s over the next six years along with other locations of Garfunkel’s and Coast to Coast. 

 

The group is also closing its London-based Food and Fuel chain of pubs immediately and while there were no immediate announcements forthcoming about both Frankie and Benny’s future and the group’s flagship brand Wagamama, there will be speculation for as long as the nationwide isolation lockdown continues. 

 

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Ideally we’d like to return to writing amusing articles about zombie companies, phoenix directors and other insolvency minutia designed to educate, entertain and inform our audience and build our credibility for the rainy day when they need to call a business rescue expert.

 

Well as you know, the dam broke and now just staying afloat seems like a triumph for some really good companies.

 

This is what we do. 

 

Once a business owner or director gets in touch to arrange a free virtual consultation with one of our team of experienced expert advisors, we prove our worth by creating a realistic strategy with them to give them the best chance they have of surviving and thriving again when the dark clouds recede.  

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