What business and insolvency stories have happened this month?
February has come and nearly gone and just like that, Spring is almost here with a sense of optimism and fresh beginnings.
Before we start looking ahead however, let’s take one last chance to catch up with all the rest of the business and insolvency stories from the month that you might have missed.
As we first wrote last month, the stationery retailer Paperchase has entered administration.
The positive news was that Tesco bought the brand and intellectual property in a pre-pack deal; however, it did not buy the 106 retail stores meaning redundancy for the 820 employees when they all eventually close this year and the end of the company’s stand-alone website.
Jan Marchant, managing director of home and clothing at Tesco said: “Paperchase is a well-loved brand by so many, and we’re proud to bring it to Tesco stores across the UK.”
The previous management only completed their takeover in August but were looking for additional funding and investment by January. A review of strategic options led them to administration and the pre-pack sale.
Paperchase was first formed in 1968 by two art students Judith Cash and Eddie Pond, when they opened a store in Kensington, west London.
In a similar deal to Paperchase, Scottish retailer M&Co has seen its brand being bought by AK Retail Holdings – owner of several larger sizes brands such as Yours Clothing, Long Tall Sally and Bump It Up Maternity. They did not buy any of the 170 physical stores which will close over the next few weeks with the loss of 1.900 positions.
Andrew Killingsworth, founder of AK Retail, said: “I am delighted to have acquired this long standing brand and that it is going to be kept alive.”
M&Co confirmed the deal via social media saying “As we haven’t received any funded, deliverable offers that would result in the transfer of the company’s stores or staff to a potential buyer, this means that all of our stores will close.
“The M&Co ‘brand’ has been purchased, but unfortunately this does not include a future for our stores, website or staff.”
M&Co experienced “a sharp rise in input costs which coincided with a decline in consumer confidence, leading to trading challenges.”
First founded as Mackays, a pawnbrokers in Paisley, in 1834, they switched to selling clothes in the 1950s before rebranding as M&Co in 2005.
Newcastle based Metnor Construction have gone into administration with all 80 staff being made redundant.
The well-known local business worked in multiple sectors including residential schemes, healthcare, hotels, leisure and student accommodation.
A spokesperson said: “Rapid inflation is causing havoc on the profit margins of businesses across the economy including construction. Metnor was not immune to the impact of rising costs, which ultimately led to its insolvency.
“Regrettably, the business was unable to continue trading and sustain the workforce.”
Snowdrop Independent Living
Specialist mobility aids retailer Snowdrop Independent Living based in the West Midlands and South Wales has gone into administration, with the immediate closure of its seven physical stores.
A spokesperson for the business said: “Having suffered financial difficulties, directors announced that the business would cease trading immediately.
“Regrettably, due to the challenging trading conditions, the business was failing to hit its revenue forecasts. All 37 employees have been made redundant with immediate effect and directors will continue to work to maximise value for creditors.
Staffordshire based luxury used car retailer Autovogue has ceased trading blaming “failing used Jaguar Land Rover vehicles” as the main reason.
A statement from Autovogue said: “With deep regret and a heavy heart Autovogue UK Limited has ceased trading.
“Unfortunately, in recent years and with the development of the global economy after Covid-19, further compounded by Ukraine and high UK inflation the automotive sector has been hit hard with significant pressures.
The business also cited a £198,000 repair bill for “huge additional costs and continuing issues with Jaguar Land Rover vehicles.
“After some nine months of intense investment rounds to support the growth of the business and new models, talks broke down directly due to the distressed economy/retail market and the investors ultimately decided not to proceed with the backing required, leaving no choice but to close the company.
The Nottingham based builder Dako Construction has gone into administration after five years of trading after being founded in 2018.
The business flourished at first, specialising in creating office and retail spaces in the residential and student sectors completing projects for Staffordshire University and in Bristol and Nottingham.
The company has ceased trading with immediate effect and the loss of 30 positions.
A spokesperson for the business said: “A combination of extremely difficult trading conditions and supply chain challenges arising from the protracted exit from the Covid pandemic in the Far East and significant cash flow challenges exacerbated by a series of late payments has seen the business unable to meet its liabilities.”
A popular candles and wellness brand based in Kilmarnock has gone into liquidation after 10 years of trading.
Owner Jackie Daziel formed the business selling handmade scented candles, wax melts and other perfume based products through a UK wide network of 5,000 sales reps and ambassadors.
A statement from the CEO to her workforce said: “As you know, it’s a tough climate out there with rising costs and the economic crisis.
“After 10 years and knowing that the next few years ahead are going to be tough, I’m stepping down and stopping Darceys. This has taken me months to reach this decision, as you can imagine, it’s not an easy one.
“My family has suffered so much in Darceys early days whilst I was building the business and I’m not putting them through, possibly the same again. The rising utility costs are so much and we can’t pass on the price increases as yourselves and your customers are in exactly the same economic crisis.”
An out-of-school activity provider operating across Bedfordshire, Cambridgeshire, Essex and Hertfordshire has gone into liquidation due to rising costs.
Multi Active ran before and after school provision and holiday clubs across more than 20 sites but managing director Kevin Jones confirmed the decision before half term this month.
He said: “Unfortunately with the cost of living, rising inflation and interest rates, we have been unable to cover our costs and the company has become insolvent. As a result of this the company will shortly go into liquidation.
“As a childcare provider the current trading climate is hugely challenging. We set out in 2015 to provide a childcare service that was affordable and reliable but we realised this is no longer achievable and our business model does not work in 2023.
“I apologise for the inconvenience this may cause with parents who have booked places for wrap-around or half term and the children that will lose out. We would have loved to have gone ahead with this but we simply cannot continue to trade at a loss as this is unethical and against my duties as a director.”
Glasgow based musical charity Nevis Ensemble that provided music outreach working with vulnerable groups such as prisons, rehabilitation units, schools, care homes and homeless centres to provide “music for everyone everywhere” has gone into insolvency due to severe financial challenges.
A statement from the charity said: “Sadly, this is where the Nevis Ensemble story ends. Following severe funding challenges, Nevis Ensemble is no longer able to deliver its activities.
“The Board of Trustees would like to take this opportunity to thank the musicians and staff from over the years who have embraced the vision of Nevis Ensemble, and especially thank the many trusts, foundations, partners and individual donors who have made this journey possible.”
A GoFundMe has been launched to help support former members who are struggling financially
The organisation paid an annual bursary of £11,000 on a monthly basis to members but were unable to pay the last amount leaving many without their primary source of income for a month. As Fellowships are unprotected under employment law there is no avenue to claim and nearly half of the fellows are non-UK citizens so do not qualify for public funds.
They aim to raise £19,000 to be split equally between the 19 fellows with any additional funds raised to be donated to other charities in the area.
A 50 year old manufacturer of children’s arts and crafts products based in Greater Manchester has gone into administration.
Brian Clegg supplied both retail and educational markets in England and Wales from four sites in the North West but had been loss making for some time and suffered from sustained cashflow pressure from rising input prices.
Directors pursued an accelerated merger and acquisition process that was conducted in recent months but, without a viable offer forthcoming, the business has been placed into administration with the loss of 40 positions.
A spokesperson said: “Brian Clegg was a well established business with its products used in nurseries and schools across the UK. Unfortunately, the business was no longer sustainable in its current form and, as a consequence, has ceased to trade.
“Options are being explored for the sale of the residual business and assets.”
Tile Giant was purchased by a new owner – Stiled Holdings – owned by former Topps Tiles chief executive Matt Williams.
They then put the company into administration and purchased the majority of it including the trading name, goodwill, the business and assets including 56 stores and the head office in a pre-pack deal.
This meant that 13 remaining stores will close with the loss of 43 positions.
The rationale for the sale is that the new owners say that the business needed “greater funding requirements” than anticipated. A further 13 Tile Giant stores have been sold to Ceramic Tiles Limited.
A spokesperson said: “While retailers specialising in DIY and Home Improvement enjoyed a period of growth during the pandemic, the squeeze on disposable income caused by the current cost-of-living crisis is now starting to place significant pressure on cash flow.
“We’re pleased to have been able to secure two transactions which will enable the majority of the company’s stores to continue to trade, and importantly, safeguards a significant number of jobs.”
Long-standing training provider Go Train has entered a liquidation process with the loss of 100 positions, ending over 30 years in the sector.
The business had secured contracts with both the West Midlands Combined Authority (WMCA) and Greater London Authority as well as the Department of Work and Pensions (DWP) for employability programmes including the Restart scheme.
Low learner numbers proved fatal for the business as it had significant debts and recruiting to pre-pandemic levels of learners was essential to fulfilling its contracts and its survival.
Chief executive Graham Clewes said that a slow recovery from Covid-19 lockdowns and an unsuccessful attempt at being acquired by a larger company means the board had no option but to close the business immediately.
He said: “It is with deepest regret that yesterday we informed our hard-working staff that we are in the process of filing for compulsory liquidation.”
Plymouth based Pepper Communications, a family-run printing and direct mail business that had been operating for 40 years has gone into liquidation.
Founded in 1982 by Steven Whitford, his four sons ran the business employing 39 people until this month. They had produced work for Disney, Harrods, Cadburys and the BBC over this time as well as local businesses and over 300,000 mail order catalogues for designer clothes retailer Seasalt.
All directors and staff have been made redundant as a result of the business ceasing trading.
Now we’re into 2023 for real, many businesses are finding it’s going to be tough going – maybe even tougher than they imagined.
Some directors might not be able to see a way back to profitability and are looking for the easiest way to close their business down efficiently.
Others know they can make a success of their venture, if they can only get out from the debts they’ve accumulated over the pandemic years and those that are making profit know they can make even more progress if they had some advice on the best way to do it.
This is why we offer a free initial consultation to any business owner or director who wants some impartial and professional advice on what options their business has based on its unique circumstances.
No matter what stage or situation they find their company is in, they are not hopeless and can still make some changes – but only if they get in touch with us first.