I Can’t Pay Staff Wages – What Can I Do?
if you worry you cannot pay the staff wages at the end of the month then it is likely that your business is insolvent and you will need to take action. There are options if you act quickly.
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Harveys Furniture Goes Into Administration
Harveys Furniture has gone into administration as it fails to find a buyer.240 jobs have been immediately lost whilst 1,300 others are at risk. Harveys’ sister chain, Bensons for Beds was also put into administration, though it was bought out in a pre-pack administration by its private equity owner, Alteri Investors..Administrators from PwC are looking for a buyer, which includes the purchase of its 20 stores and three manufacturing sites.For now, its stores continue to trade but those in the industry believe a buyer is unlikely to be found.Zelf Hussain, joint administrator at PwC said: ‘’the group had been facing increasingly challenging trading conditions in recent months, in particular Harveys furniture business. This has resulted in cashflow pressures, exacerbated by the effects of coronavirus on the supply chain and customer sales. It has not been possible to secure further investment to continue to trade the group in its current form.”
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Oasis and Warehouse likely to go into administration
17/06/2020Almost two months after Hilco Capital secured a deal to buy the Oasis and Warehouse brands, saving it from administration, we hear that the Oasis and Warehouse online businesses and their associated intellectual property would be bought by Boohoo.Boohoo has a market value of almost £4.7bn. Its portfolio of brands now moves to 9. Just last month it struck a deal to buy the minority interests in women's fashion retailer, PrettyLitttleThing.30/04/2020Today we hear that Hilco Capital, the former owner of HMV, has agreed a deal with administrators regarding high street fashion chains, Oasis and Warehouse.Hilco has agreed to buy both brands, along with Idle Man and the stock from their many outlets across the UK. So, the intellectual property assets and some stock has been sold.However, Oasis and Warehouse Group's stores are not included in the deal, meaning immediate redundancy is the case for over 1,800 staff. The staff have been told no statutory redundancy pay will be received.Since, April 22 the retailers stopped trading online because of the “rising costs of fulfilling online orders and associated logistical challenges, after appointing Deloitte as administrator the previous week.''Joint administrator of Deloitte, Rob Harding explained the sadness of having to said: “It is with great sadness that we have to announce a sale of the business has not been possible and that we are announcing so many redundancies today. This is a very difficult time for the Group’s employees and other key stakeholders and we will do everything we can to support them through this.”15/04/2020Addressing the rumours from yesterday, it is now confirmed that high street fashion chains, Oasis and Warehouse have fallen into administration. Deloitte are the appointed administrator.92 stores and 437 concessions are affected, all these being in UK. 200 jobs have been lost with immediate effect. Around 1,800 staff, including those on the shop floor, in concessions and those at head office, will be furloughed.The brands will continue to be sold online, whilst the administrators work on finding a buyer.Chief Executive of Oasis and Warehouse, Hash Ladha explained the situation as unpredictable, shocking and difficult for all.Joint Administrator at Deloitte, Rob Harding said how the retail industry as a whole was suffering devastating effects from coronavirus."Despite management's best efforts over recent weeks, and significant interest from potential buyers, it has not been possible to save the business in its current form."It is thought that there will be interest from bidders in buying the businesses but of course with the current economic situation, it is all very uncertain.14/04/2020Oasis and Warehouse look likely to be the next casualties of the coronavirus crisis. Sky News has reported that they are about to file an intention to appoint administrators at Deloitte, with an announcement expected later on Tuesday or Wednesday.Three weeks ago The Oasis and Warehouse Group, which is owned by the failed Icelandic lender Kaupthing, was approached for a possible sale from an unnamed buyer. Kaupthing has managed to offload some of its brands already such as Karen Millen and Coast to Boohoo.Although there is understood to have been strong interest in a deal, the uncertainty caused by the coronavirus pandemic is thought to have made a solvent sale impossible to conclude.Both retailers support approximately 2300 jobs.The difficulty facing many retailers is stark. The High Street has already been under pressure and the creditworthiness of these companies has made them unlikely to be able to draw on the government help with respect to loans. Yes, they can benefit from the furlough arrangement and the business rates but with high rents and creaking balance sheets it is likely that many won't be able to make it through this crisis.
ReadLeon serves up a CVA
1 December 2020It has been reported that healthy restaurant chain, Leon, has served its creditors details of a restructuring plan. Included in the plan is:A multimillion pound investment from shareholders to secure its future 4 restaurants switching to a rent-free model The majority of restaurants switching to turnover-based rentsThe plan is proposed to last just 2 years, in oppose to the typical 3 year period.23 November 2020Restaurant chain Leon becomes the latest to explore an insolvency mechanism in order to try and secure its future, amid challenges brought on from the coronavirus pandemic, according to Sky News.Leon is heard to be drawing up proposals with advisers, for a company voluntary arrangement. This would involve seeking rent cuts from landlords and could involve some site closures for those not performing. Jobs are also at risk – though the implications for jobs and any set figures are unknown as it stands.It was just earlier in May that Quantuma were reported to be drafted in to help the chain secure rent cuts from landlords.The company, which has gone on to become a key player in the healthy fast-food sector, was set up in 2004 by Mr Dimbleby, John Vincent and chef, Allegra McEvedy. The menu is inspired from the founders; Mediterranean roots- mixing its flavours, variety and natural healthiness.It operates from more than 75 sites across the UK, mainly in busy city centres and transport hubs, as well as in Washington DC, Oslo, Amsterdam, Dublin, Rotterdam and Gran Canaria.It has faced difficulty, as have many other players in the fast-food market, particularly due to the slump in commuter numbers, which were a key target consumer group.
ReadCoast Collapse into Administration
Coast becomes the latest fashion chain to collapse into administration.Last month, Aurora, Coasts parent company, was searching for a buyer, after the business was hit hard from House of Fraser’s recent difficulties.On Thursday evening, staff were told that all of Coast’s 24 standalone stores will close, with 300 jobs at risk.PwC have been appointed as administrators.Upmarket womenswear rival, Karen Millen have brought Coast’s brand, website and concessions, as well as taking on 600 staff. They’re said to be working with the existing management team to continue to grow and develop the new business. Though this sale gives a firmer financial footing for Coast, not everything was included in the transaction, leaving 24 retail stores behind.PwC director and joint administrator, Mike Denny, states ‘’The businesses had been facing financial difficulties due to structural changes in the retail space and specifically the concession partner market, as well as a softening of demand for occasion wear.’’Coast operate a number of concessions in House of Fraser stores and so faced a multi-million-pound bill following the department stores £90m pre-pack administration sale. They were not the only fashion brand to have taken a hit, with Ted Baker, Mulberry and Quiz also being affected.
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Betterware goes into administration soon after Kleeneze
Betterware, which sells household items via a catalogue sent to millions of homes, has gone into administration following its sister company Kleeneze. Betterware employed directly 90 people and thousands of door-to-door selling roles.Betterware said that difficult trading conditions and cashflow problems had been responsible for its demise.The firm started in 1928 when it was founded in east London as a door-to-door seller of brushes and polishes. The catalogue was launched in the 1970s and in 2015 the business was bought by JRJR, a Texas-based consumer sales group.The company relies on thousands of self-employed agents who distribute the catalogue around the country. Many of them have other forms of income to supplement their earnings.Begbies Traynor, the company’s administrator, said that Betterware had ceased trading, with all staff made redundant. “Our aim was, of course, to find a purchaser for the business as a going concern in order to safeguard the jobs, but unfortunately this did not prove possible,” it said.Any parties interested in acquiring assets of the company has been asked to contact the joint administrators Gareth Rusling and Claire Dowson of Begbies Traynor as soon as possible.No details have been given to those who may have ordered goods but have a look at our page on “will I get my goods!”This is what one of the regional managers sent to us to put her side of the story
ReadiCandy goes into administration due to cash flow problems
iCandy has gone into administration due to cash flow issues that have persisted since the start of 2017.The company was founded by Clinton Lewin in 2012 after his previous company – Clinton Cards – went into administration in the same year. Why has iCandy gone into administration? Administrators FRP have cited two primary reasons for iCandy falling into administration; a reduction in consumer spending and a drastic increase in business rates. In combination, these factors prevented the company from generating sufficient cash flow to continue operations as they had done previously.Supported by Lewin's personal savings, iCandy opened a total of 14 stores between being founded in 2012 and 2016. This was facilitated by a lengthy period of strong overall revenue growth, evident from the revenues of £4.3m for the year ending July 2016. However, the aforementioned pressures caused growth to slow to unsustainable levels in the period between then and the start of 2017.In terms of customer numbers, administrators blamed increasing fuel and food prices. Customer spending was especially low in many of iCandy's smaller branches. These circumstances led Lewin to call in the administrators with a view to finding a more sustainable long-term solution. What will the administrators do? FRP Advisory, led by partners Glyn Mummery and Jeremy French, have been appointed as administrators. While iCandy and its assets are up for sale, the administrators have outlined their intention to keep 10 stores open for trading. These stores currently employ a total of 79 full and part-time employees. However, four stores across Hertfordshire, Suffolk and Essex will be closed, with 22 staff set to be made redundant.On 9 May, Mummery stated: "Many of the stores continue to trade well from desirable locations in the more thriving market towns of Essex, Hertfordshire and Suffolk, and they continue to capture the purses of shoppers looking to spend within the wider gifts market."FRP claim to have already communicated with a number of parties that have shown potential interest in a buy-out. Total unsecured liabilities are thought to be in the region of £2m.The question really is would a CVA have been a better option? A CVA could have allowed the unprofitable stores to be closed down and given the company breathing space to restructure. Of course, it does depend on the support of the creditors at 75% by value and there may have been an immediate threat in the form of a winding up petition. But it is worth remembering that many business can be saved by the CVA mechanism.
ReadDolphin Bathrooms to enter administration ( Deposit Update)
Update 7/07/2011; It looks like the customers of Moben Kitchen and Dolphin Bathrooms who paid cash deposits are set to lose all of it as the administrators at Deloitte have been unable to find a buyer. Those who paid by Debit Card and Credit card should get their money back.Previously we said; The owner of Dolphin Bathrooms, Homeform, has announced that it intends to go into administration. The company owns other well known brands such as Kitchen Direct, Moben Kitchens, and Sharps Bedrooms.The firm has 160 showrooms across the UK and employs 1300 people. The firm has said that it is hoping to sell the Moben Kitchen and Dolphin Bathrooms.Deloitte are the administrators for Dolphin Bathrooms and any queries from customers should be directed at them. We are not able to answer specific enquiries on the phone as this blog is for information purposes only. If your business is struggling as a result of the administration by all means call.
ReadMoben Kitchens in Administration ( deposit update )
Update 7/07/2011: Moben Kitchen and Dolphin Bathroom customers who have paid their deposits in cash or set to lose all of it. The administrators at Deloitte have said. This amounts to 453 people whose deposits are worth £1.5m. Should a deposit protection scheme be put in place for major household purchases??Previously we saidMoben Kitchens is to enter administration. BBC Breakfast news covered the story today saying it will close and all jobs will be lost. We suspect that that is a bit premature and that some parts of the business may be saved or sold. But until the formal appointment of an administrator we will have to wait and see.Update 4pmDeloitte are the administrators for Moben Kitchens and any queries from customers should be directed at them. We are not able to answer specific enquiries on the phone as this blog is for information purposes only. If your business is struggling as a result of the administration by all means call.
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