April's top business and insolvency stories

Welcome to our regular monthly round up of all the business and insolvency stories that have happened in the past 30 days. 


What were the top business and insolvency stories in April?

business suit

 

 

April has certainly showered us with a lot of stories that you might have missed but don’t worry – you can catch up in one place right here!

 


Pre pack administration – what directors need to know


 

Peacocks and Bonmarche emerge from administration

An investment consortium led by former Edinburgh Woollen Mill (EMW) CEO Steve Simpson completed a buy out of retailers Peacocks allowing them to exit administration. 

 

The group will retain 200 of the chain’s 400 plus stores, keeping 2000 jobs with hopes to keep more depending on the results of negotiations with the landlords of various outlets. 

 

Peacocks went into administration in November 2020 as part of a process involving its parent – the EWM group. 

 

Another former property of the group – Bonmarche – was also purchased by Mr Simpson in a separate deal with negotiations continuing regarding the fate of the previous 72 stores and 531 employees the company had. 

 

The timing for these deals is fortunate as non-essential retailers were allowed to reopen to the public from April 12 and can take full advantage of consumers pent up demand. 

 

Grensill jobs go

In a story that is continuing to make headlines for other reasons, 440 workers in Warrington have been made redundant after Greensill Capital Management Company Limited went into administration following the collapse of the parent company in Australia. 

 

Greensill were also the main lenders to Liberty Steel so the ramifications of this process could continue to be felt throughout the year, especially if no buyer can be found for the business. 

 

Total Fitness

The various lockdown restrictions have severely impacted the health and fitness industries more than most. 

 

While some are still struggling with restoring full services until all restrictions are lifted, Total Fitness has moved to take advantage of the protection insolvency procedures can bring to a company by entering a company voluntary arrangement (CVA). 

 

A spokesperson said: “The cumulative effects of the lockdown restrictions have had a major impact on gym and health clubs across the UK. 

 

“Total Fitness clubs have now been closed for eight months. With membership payments on pause, this means we are operating with very limited income and continuing costs.

 

“Total Fitness has been no exception to the impact of Covid-19 and is now seeking the assistance of all partners including landlords and suppliers to support the strong, long-term future of the business by launching a CVA.” 

 

16 of its 17 facilities will remain in operation, opening when allowed while managers work with landlords and creditors to secure a solid and stable future for the business. 

 

Brooks Brothers

Another casualty of the coronavirus pandemic is the office outfit. 

 

Working from home hasn’t stretched to wearing or buying a new suit so this collapse in demand has badly affected the upscale and upmarket clothes retailers. 

 

One example is Brooks Brothers – the American based suit manufacturer and retailer have put their UK division into administration. This follows the parent company opening bankruptcy proceedings in the US before eventually being bought out by a consortium. 

 

A spokesperson said: “The reason for appointing administrators is because of the prolonged closure of non-essential retail, despite the directors best efforts and regular communications with landlords and local creditors, mounting rent arrears and the problems of the worldwide group.”

 

The administrators have intimated that they would reopen the business’s three UK based stores at the O2 Arena, Westfield London and Bicester Village in Oxfordshire as soon as practicable, although the company had already surrendered the lease of their flagship London location on Regent Street.

 

Fellow US-based retailer Gap have also announced that they are considering moving to an online-only model in Europe which would have consequences for their retails stores and staff in the UK.  

 

The downward trend continues for the fashion industry as Menswear supplier Prominent Europe that owns Chester Barrie and supplies retailers such as TM Lewin and Moss Bros has proposed an orderly wind-down and closure of its business. 

 

Founded in 1993, the group’s owners stated that the decision was due to unprecedented changes in the menswear tailoring market.

 

A spokesperson said: “After deep consideration and with a heavy heart we have had to announce to our 40 employees that we will close our business over the next year in an orderly manner whilst satisfying our orders and liabilities. 

 

Quilliam Foundation

Times are tough if you’re a retailer but what if you’re a charity and already rely on grants and donations to function?

 

The Quilliam Foundation was formed in 2007 as a think-tank to counter the growing influence of extremism in religious communities by fostering a shared set of social belonging and to advance liberal democratic values. 

 

11 employees have been made redundant. 

 

Maajid Nawaz co-founded the organisation in 2007 with best-selling writer Ed Husain, and said: “Due to the hardship of maintaining a non-profit during Covid lockdowns, we took the tough decision to close Quilliam down for good. This was finalised today. A huge thank you to all those who supported us over the years.”

 

Phantom Orchestra halved 

Arts and entertainment have also been under huge pressure and even gradual reopening won’t be enough to bring the sector back in its entirety. 

 

One example is the announcement from the Cameron Macintosh and Really Useful Group that their revived production of The Phantom of the Opera would only be using a slimmed-down orchestra rather than the full standard West End ensemble. 

 

As a result, 13 musicians have lost their positions and won’t be playing when the curtain rises on the 35-year-old show’s new performances resuming at Her Majesty’s Theatre in July.

 

These include the harp, oboe, trumpet, horns and percussion as well as several violins. 

 

A spokesperson for the promoters said: “The new production will be using the acclaimed orchestration for 14 musicians that was created for the international productions of the show. 

 

“These orchestrations are just as thrilling and rich as the original but would not have been possible with the technology available in 1986. The new Phantom orchestra will remain one of the largest in the West End. 

 

StepChange losing staff due to falling demand for services

StepChange, one of the UK’s largest national charities that offers expert debt advice and fee-free debt management is making close to 10% of its staff – 140 to 170 posts – redundant.  

 

Chief Executive Phil Andrew said: “We are not immune from the wider pressures arising from Covid, despite the significant additional support we have received from Government and other sources during the pandemic. 

 

“The Government, the Money and Pensions Service, and the debt advice sector itself were expecting a huge wave of demand to materialise once the emergency support measures fade away, and we still do. 

 

“Based on 2021 experience to date, however, our original expectation of advising 400,000 clients this year is not going to materialise. The fact that we expected demand to increase in the future doesn’t change the current reality. 

 

“As a prudent charity, we will not compromise our financial stability by relying on future funding to support our current operating costs.  

 

The charity’s income is based upon how many clients it helps, with those volumes affecting the level of funds received from central government and devolved regional authority funds. They also receive an amount from creditors in recognition of its work to support people in repaying their debts.

 

They supported 200,000 clients in 2020, down from 300,000 in the previous year. 

 

The charity has frozen pay and as well as making redundancies, still has staff furloughed under the CJRS.

 

Mr Andrew said: “It is not what we would have wished to do, even though it is absolutely the right thing to do.”

 

Breast Cancer Haven

The charity Breast Cancer Haven has also announced that it is suspending operations at all of its UK centres and putting all staff on notice of redundancy. 

 

A spokesperson said: “It is with huge sadness our Board of Trustees have made the extremely difficult decision to suspend operations for the time being including pausing the delivery of our live online service. 

 

“As a result of the pandemic our income has decreased significantly. At the beginning of March 2020, we were forced to close our five centres and other in-hospital face-to-face services.  

 

“Despite this series of cost cutting measures and saying goodbye to valued colleagues, we are not able to continue normal operations at this time.

 

Despite the resumption of trading for many businesses this month, there is no sector or part of the country that has remained unscathed from the economic effects of the coronavirus pandemic and subsequent lockdowns. 

 


Liquidation or striking off? What’s the difference?


 

If you want your business to be around to take part in the recovery then one of the best things you can do now is to get in touch with us for some specialist free advice.

 

After an initial chat with one of our experienced advisors, you will be in a better position to understand what choices you can make now to better prepare your business or to move in a new direction entirely

 

Whatever you ultimately decide, you’ll be glad you got in touch. 

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