A guide for redundant employees in administration or insolvency situations

Quiz Clothing In Administration Rumours

in A guide for redundant employees in administration or insolvency situations News Retail What is a CVA (Company Voluntary Arrangement)?

Update 20th FebruaryIt has been confirmed that Quiz has gone into administraton with the loss of approximately 200 jobs.  23 stores will close.Sky News has reported that Quiz, which is chaired by the former JD Sports chief Peter Cowgill, is lining up Teneo as administrator in a move expected to take place before the end of next week. According to reports, Quiz is purportedly looking to close up to one-third of its stores in order to stabilise its struggling business and reduce costs.The fast fashion chain, which now employs about 1,500 could lose hundreds of jobs as a result of the move, which was lead by the founding Ramzan family.Quiz has hired restructuring specialists at Teneo to investigate its possibilities. Quiz is scheduled to delist from the London Stock Exchange's AIM market and return to private ownership after a shareholder vote earlier this month.Possible actions to help with the closures include a company voluntary arrangement (CVA) or pre-pack administration.A person familiar with the matter told the Telegraph who originally broke the story that "nothing is being ruled out," and that a decision is anticipated in the upcoming weeks.Since taking over as CEO in March 2023, Sheraz has reportedly concentrated on reducing expenses by selling off the chain's underperforming locations.With only £2.3 million in liquidity, including £400,000 in cash reserves and £1.9 million in undrawn banking facilities, Quiz disclosed in the lead-up to Christmas that it was on the verge of going bankrupt.Sheraz's father, Tarak, who started Quiz in 1993 with just one store in Glasgow, gave the business an emergency loan of £1 million last summer. Quiz is now frantically looking for additional finance, probably on harsher conditions, as HSBC is apparently unwilling to continue backing the company.In contrast to its £2.3 million profit the year before, Quiz reported losses of almost £7 million last year. The job of leading the retailer through its turnaround has been placed on chair Peter Cowgill, a former manager of JD Sports.In the upcoming weeks, a formal announcement on the company's future is expected.With Poundland and now Quiz are we going to see a string of retail failures?  At least a CVA gives the company a good chance of continuing to trade

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Quiz Clothing In Administration Rumours

Poundland Likely To Close 100 Shops

in A guide for redundant employees in administration or insolvency situations News Retail What is a CVA (Company Voluntary Arrangement)?

Update 13th JunePoundland has been sold for 1Euro.  It has been announced that investment firm and former Laura Ashley owners Gordon Brothers have taken the chain on.  The company will go into a court approved restructuring process as part of the deal.  This will mean that all class of creditors, secured and unsecured, will be subject to the courts decisions on how much of the debts they will get repaid.  This restructuring is part of the Section 26A of the Companies Act.Part 26A offers the ability to "cram-down" the plan, meaning the plan can be approved even if a dissenting class of creditors or members objects, provided that certain conditions are met (such as demonstrating that dissenting members would not be worse off under the plan than they would be in an alternative scenario). A restructuring plan under the Act is complex and expensive so is really only suitable for much larger businesses.Sky News has reported that Polish-based Pepco Group, which has controlled Poundland since 2016, has recruited AlixPartners, the retail experts, to handle a sales dip that has prompted worries about company's future.  The company operates over 850 sites and employs 18,000 staffLike for like sales were down 7.3% over the crucial Christmas period.AlixPartners is understood to have been formally engaged last week, with options including a company voluntary arrangement (CVA) or restructuring plan said to have been discussed by a range of advisers on a highly preliminary basis.In its trading statement, Pepco said that Poundland had suffered "a more difficult sales environment and consumer backdrop in the UK, alongside margin pressure and an increasingly higher operating cost environment"."We expect that the toughest comparative quarter for Poundland is now behind us - the same quarter last year represented a period prior to the changes made within our clothing and GM [general merchandise] ranges - and therefore, we expect the negative sales performance for Poundland to moderate as we move through the year."​The company is said to be looking at multiple ways to improve its cash position by selling more goods over £1 to expand its range of products.The mere fact that it has been leaked that a company voluntary arrangement (CVA) has been discussed is pertinent.  The reason is because talk of a CVA can be a very useful tool to put pressure on landlords to consider rent reductions.  Under a CVA the retailer can exit leases, at no cost, leaving landlords out of pocket.  To understand a bit more about this please read our CVA and retailers article.Of course it is also likely that the company will come under extra pressure from the increases in minimum wage, NI increases and the loss of 75% business rates relief.Since the cost of living crisis there has been strong competition from other discounters like B&M and Poundstretcher.  Poundstretcher themselves used a CVA to reduce costs. They exited in 2022 paying just 12p in the £1 to its unsecured creditorsIf such a big retailer were to fail this would send shockwaves through the sector and would be a political headache for the Labour Government.​​

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Poundland Likely To Close 100 Shops

Edinburgh Based Hickory Goes Into Administration

in A guide for redundant employees in administration or insolvency situations Hospitality

Hickory, a Scottish catering and hospitality firm, has gone into administration, with a 100 Jobs at risk.Hickory, a restaurant founded in 2012 in Edinburgh, caters for special occasions including weddings and private and business gatherings. Additionally, it serves festivals like the Scottish Open, Borders Book Festival, and Royal Highland Show.The company entered administration on November 20th, according to documents filed with Companies House. Opus Restructuring & Insolvency has been appointed, and Mark Harper and Charles Turner are currently investigating the options available to Hickory and its creditors.Like many other hospitality businesses the company has had difficulty recovering from the lockdowns in the UK during the Covid pandemic. According to its most recent records submitted to Companies House, the company had an average of 142 employees in 2023.As a result, there was a period of weak trading and margins, and working capital was severely strained. This resulted from the cost of living crises, rising interest rates, and inflation.Last year's turnover was £5.6 million, however a number of cash flow issues led to the decision to hire administrators.In its most recent financial statements, Hickory reported that its debtors owed £2.5 million within a year, up from £1 million the year before. The amount of trade creditors increased from £560,000 to £1.1 million.Harper said: “We are working closely with the directors and a number of stakeholders to ensure continuity of the forthcoming events.” This includes weddings, charity balls and staff parties.The hospitality industry is reeling from the aftershocks of the pandemic and the war in Ukraine. The latest rises for employers national insurance has meant confidence in the industry is at a low ebb.

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Edinburgh Based Hickory Goes Into Administration

Typhoo Tea In Administration Threat

in A guide for redundant employees in administration or insolvency situations Notice of Intention to Appoint Administrators

One of the Britain's oldest tea companies has filed an intention to appoint administrators in the court. This follows a very difficult year with sales falling and an expensive break in at one of its factories.  Sales fell from £38m to £25m in 2023 and it had to take an exception cost of £24m relating to the damage of stock and equipment following the break in. The company was founded in 1903 by grocer John Sumner and was at one time the best selling tea brand in the UK. It should be noted that the intention to appoint administrators is a way of protecting the company from aggressive creditor actions, such as winding up petitions.  It gives the company protection for 10 days whilst it tries to rescue the business.  This might be additional finance or a sale.  EY is named as the possible administrator and will be looking at the options. Private equity firm Zetland Capital has been the company’s majority shareholder since 2021. Typhoo’s debts stood at £73m at the end of September 2023, compared to £53m a year earlier. According to the company's accounts it has made losses in excess of £40m every year since 2019.     

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Typhoo Tea In Administration Threat

Stapleford Park Hotel Goes Into Liquidation

in A guide for redundant employees in administration or insolvency situations What Does Going Into Administration Mean?

Following the collapse of the wedding venue, Stapleford Park Hotel in Leicestershire,  90 jobs have been lost and all reservations and events cancelled.It was confirmed on Thursday that Leonard Curtis had been appointed as Stapleford Park Limited's liquidator.The Grade-I listed property near Melton Mowbray was not owned by the hotel company, according to the firm, and its future "remains uncertain at this stage."Following the venue's closing, which featured superstars including the late US pop sensation Michael Jackson, 92 employees were laid off."Our priority was to ensure the most orderly wind-down of trading possible," stated Alex Cadwallader of Leonard Curtis, who was named a joint liquidator with Neil Bennett.Alex said; “Significant efforts were made to communicate with and re-locate the guests that were staying at the hotel, which was at approximately 50% occupancy.“Leonard Curtis attended the site and worked closely with front of house staff to make this possible, and the wider group also met some essential costs to limit the impact on guests and future bookings.“However, we fully appreciate that some guests will have been adversely impacted.”The Grade-I listed mansion is surrounded by 500 acres of parkland and 48 guest rooms.The hotel's management "was unable to generate the turnover required," according to the liquidator, "despite efforts to reach profitability." 

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Stapleford Park Hotel Goes Into Liquidation
hypersonic plane

Reaction Engines Goes Into Administration

in A guide for redundant employees in administration or insolvency situations What Does Going Into Administration Mean?

​​Reaction Engines, a company working on a hybrid rocket engine that will allow for hypersonic flying, submitted a notice of intention to appoint administrators. The administration will be managed by PwC restructuring specialists.The company was dubbed as being able to launch the "next Concorde" but now 173 of the 208 staff have been made redundant.In a statement PwC said [Reaction Engines] had been “pursuing opportunities to raise further funds, but unfortunately, these attempts were unsuccessful”.Sarah O’Toole, joint administrator and partner at PwC, said: “It’s with great sadness that a pioneering company with a 35-year history of spearheading aerospace innovation has unfortunately been unable to raise the funding required to continue operations.”The Oxfordshire business had been negotiating for a financial lifeline with its shareholders, notably the Strategic Development Fund of the United Arab Emirates.It was hoped that Sabre, the hybrid jet and rocket engine being developed by Reaction Engines, could have allowed hypersonic spacecraft to travel from Britain to Australia in as little as four hours.Reaction's Sabre technology, short for Synergetic Air Breathing Rocket Engine, was first developed in 1989.The company has received several government subsidies in addition to investments from BAE Systems and Rolls-Royce. But it also consumed tens of millions of pounds annually.Last year, the business raised £40 million from investors, including those in the United Arab Emirates, increasing its total capital to almost £150 million.The most recent financial statements show that Reaction's yearly losses in 2022 increased from £18.4 million to £25.7 million, while its sales decreased from £7.2 million to £4.7 million.

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Reaction Engines Goes Into Administration

Completely Motoring Goes Into Administration

in A guide for redundant employees in administration or insolvency situations What Does Going Into Administration Mean?

Family owned Staverton and Gloucester-based company  Completely Motoring Ltd. (CM) that specialises in Vehicles and Motorbike sales has gone into administration and is seeking a buyer.The firm was created in 2009 and has grown to become a major used and new vehicle reseller in Wales and the South West, employing 165 people across 14 showrooms and 11 locations.To March 31, 2023, the firm reported turnover of £78.4 million, up from £50.3 million, although pre-tax earnings fell from slightly over £1 million to £677,000.After a difficult summer and financial issues, the group has gone into administration.Azets restructuring partner and licensed insolvency practitioner Jonathan Amor, Matthew Richards, and Alessandro Sidoli of Xeinadin Corporate Recovery Limited were appointed joint administrators of Completely Motoring Ltd, John Wilkins (Motor Engineers) Ltd, and Thunder Road Motorcycles Ltd.After their appointment, the joint administrators have invited interested parties to approach them as quickly as possible to ensure the group's continuation.Jonathan Amor said: "After weak summer sales, the group is struggling financially. Thus, the group is under administration to preserve it.”We are discussing sales with interested parties. We have received many expressions of interest and ask any further parties to contact us as soon as possible to secure the group's future and save as much of the business and employment as feasible."The group's 2023 accounts showed £4.37 million in fixed assets, £23.8 million in current assets, and £2 million in net assets.

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Completely Motoring Goes Into Administration
TGI Logo

TGI Fridays Secures A Rescue Deal Resulting In 35 Immediate Site Closures

in A guide for redundant employees in administration or insolvency situations Retail What Does Going Into Administration Mean?

Update 07th OctoberBreal Capital and Calveton UK have secured a rescue deal for TGI Fridays, meaning the chain will continue to exist on UK high streets.However, the deal includes just 51 of its 86 sites, forcing 35 to shut with immediate effect.1,012 redundancies have been made - please refer to our guide here on your rights in redundancy.The new private equity owners, Breal and Calveton, jointly own the upmarket restaurant chain D&D London. Between them they have also had investments in Byron Burger and wine bar chain Vinoteca - so they are no stranger to the restaurant world! A full list of the TGI Friday sites closingBarnsley Birmingham Bracknell Brighton Marina Bristol Cabot Circus Cardiff Newport Road Chelmsford Cheltenham Croydon Derby Dundee Durham Edinburgh Fort Kinnaird Enfield Gateshead Gloucester Quays Halifax Jersey Leeds Leeds Trinity Leicester Lincoln Manchester Royal Exchange Newcastle Eldon Square Newport Northampton Prestwich Romford Sale Solihull Southampton West Quay South Speke Sutton Coldfield Swansea Watford NorthUpdate 19th SeptemberHostmore, the owners of TGI Fridays has gone into administration and the 86 sites are now officially up for sale."The sale process remains ongoing, with no decisions having been made to close any existing stores, and TGI Fridays continues to operate normally across the country," a Hostmore spokesperson told the BBC.According to reports in the Telegraph administrators at Teneo, the restructuring firm, are on standby if TGI Fridays cannot sell its restaurants.  The firm ran into trouble following its attempted foray into the US.  The chain has 86 restaurants and employs 3000 people.The owners of the chain, Hostmore, has £35m of debts.The business was spun out of private equity trust Electra in November 2021 in a move that Hostmore chief executive Robert Cook hailed as a “significant milestone”.Its shares started trading at 147p but by March of last year it had lost 90% of its value.  By Monday 16th September 2024 the whole company has been valued at £1m. Could it be that TGIs could go into a CVA? The CVA would only really work if the main problem was high rents or just certain outlets needed to be closed down.  The money that it owes its lender is no doubt secured so they have the power to call in administrators at any time.Without knowing more about its exact financial position it is hard to say.If the company does go into administration it is likely that a number of the restaurants, which are making money, will be snapped up by other restaurant groups and may continue to trade under the TGI brand.  If not then the owners will take advantage of their prime locations.

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TGI Fridays Secures A Rescue Deal Resulting In 35 Immediate Site Closures

ISG Goes Into Administration and is the biggest Collapse since Carillion in 2018

in A guide for redundant employees in administration or insolvency situations Construction

Update 28th OctoberFirst large casualty of the ISG administration can be seen here https://www.punchline-gloucester.com/articles/aanews/cheltenham-lighting-firm-goes-into-administration​ Update 22nd OctoberAdministrators at ISG have discovered that the company owes some £89m to its trade creditors, with 13 subcontractors owed more than £1m each.​“Keith Steven of KSA Group commented, with over £180m of debt owed to trade suppliers, contractors and subcontractors, this will have hit the construction sector hard. Many creditors will experience trading losses as a result. And with recoveries from the administrators and liquidators work expected to be close to zero or zero, this will have a huge impact on creditors.”.​​​​​​ISG, the construction company and UK Government contractor, has entered administration, making 2,200 workers redundant with immediate effect.Based on turnover, ISG was the sixth largest construction company in the UK, with revenues of around £2.2bn. Despite this, the firm has faced financial strain for some months and attempts to secure a rescue deal failed.ISG Chief Executive, Zoe Price, explained the situation had arisen due to ''legacy issues'' relating to ''large loss-making contracts'' secured between 2018 and 2020.A notable project ISG completed was the Velodrome for the 2012 Olympics. Most recently, the contractor was working on 69 Government projects - 22 of these for the Ministry of Justice.A spokesperson of Ministry of Justice said that contingency plans were in place to mitigate the impact of ISGs collapse. Administrators will be worked with, to ''find alternative ways to deliver these projects where necessary''.As of yet, no administrators have been confirmed as appointed, but rumours are circulating that it will be Ernst & Young.The last time there was a high-profile collapse in the construction sector was in 2018 with Carillion's administration. The aftermath of that collapse was lengthy delays in projects and in addition, increased costs. Is the same going to happen for ISGs paused projects?The collapse of yet another big construction company highlights cracks in the UKs construction industry and certainly raises some questions.Suzannah Nichol, CEO of Build UK (the sector's trade body) remarked, ''While there have been changes since Carillion six years ago, there clearly has not been enough change.''If you are an employee who has just been made redundant, please take a read of our helpful guide here.

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ISG Goes Into Administration and is the biggest Collapse since Carillion in 2018
construction site

Hadden Construction Goes Into Administration

in A guide for redundant employees in administration or insolvency situations Construction What Does Going Into Administration Mean?

Hadden Construction, the Perthshire housebuilder established in 1992, has gone into administration with the loss of 66 Jobs.Work on active sites including supported living apartment developments and affordable homes will stop depending on an evaluation of ongoing projects.This week joint administrators Ben Cairns and Jonny Marston from Alvarez & Marsal were appointed to "wind down" company operations.The failure of the company was blamed on rising materials costs and an increase in labour rates.Mr. Cairns said: "Like other contractors, Hadden Construction has been battling a number of headwinds in recent years, including inflated materials prices, rising labour costs and supply chain interruptions.“As administrators, we will seek an orderly wind down of the operations and will welcome any investor interest in the company’s assets.”Mr Cairns added: “We understand that today’s news is unsettling for the company’s employees and will be doing all we can to support them over the weeks ahead.”With a turnover of £30.2 million, the most recent figures for the company for the year ended March 31 2023 show a pre-tax profit of £260,503.Hadden was appointed by the Scottish Procurement Alliance to its £100 million Refurbishment and Modernisation (RM3) Framework in March of this year. Apart from several other public sector frameworks including Scotland Excel's New Build Residential Framework, Wheatley Group, Link Group, Hub East Central, Hub South East and The City of Edinburgh Council, Hadden was already appointed to SPA's Public Buildings and Infrastructure (PB3) Framework and New Build Housing Construction (H2).In addition, it was preparing to replace 20 chalets on a permanent Gipsy Traveller site near Perth, the company signed a £1.9m design and construct contract in April to deliver 10 reasonably priced homes for rent in Newtyle for Abertay Housing Association.Elsewhere, Hadden had worked on a £6.25 million renovation at the Muirhead House student residence at the University of Stirling.The construction industry has the highest insolvency rate when compared to other industries. This is due to a number of factors.Below are some of the common problems we’ve seen happen in the industry: Contract arguments and QS problems. Bad debts. Delays in repayments from HMRC, regarding CIS deductions (which are connected to PAYE scheme). HMRC can be slow in making CIS refunds, leading to issues with cash flow. Time to pay deals with HMRC for PAYE and VAT (where applicable) being too expensive for your cashflow. Losses made on large contracts, where large clients or main contractors slow down payments and sometimes go into administration. Hitting YOUR cashflow. So called “subby bashing”. Issues with sub-contractor non performance or slow completions. Difficult customers, be they private individuals, clients or contractors – who add extra work on and won’t pay extra! Lengthy contracts with material prices agreed at beginning. I.e. quotes do not keep up with rising costs. Especially tough after huge price rises in recent years. Less focus on financial accounts, financial management due to directors and management being onsite. Hard to win new contracts if cash flow is tight, perhaps due to low credit rating. Retention sums not released at agreed times. Suppliers taking legal actions such as County Court Judgments, or even issuing winding up petitions.

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Hadden Construction Goes Into Administration
stone kitchen

Levantina Goes Into Administration

in A guide for redundant employees in administration or insolvency situations What Does Going Into Administration Mean?

Operating in Basingstoke and Rotherham, Levantina UK, the stone company, has entered administration citing declining demand in the UK's housing and refurbishment sector as a main cause of its financial difficulties.Levantina UK is the UK distribution division of Levantina Group, a worldwide stone business focused in extracting, manufacturing and distributing stone products including marble, granite, limestone and other natural stones.Mostly buying semi-finished stones in slab form, the company has more than 350 B2B customers from stonemasons and kitchen and bathroom businesses in the UK.Levantina (UK) Limited reported turnover of £5.1 million in accounts for the year ended December 31 2022. But over the same period, its post-tax losses grew from about £538,000 to almost £723,000.Now appointed as joint administrators of Interpath Advisory are Nick Holloway and Stephen Absolom; the wider multinational Levantina Group is not affected by the administration. After the joint administrators were appointed, the company kept its twelve employees."We are working with the business to continue to trade and keep operations running at the sites in Basingstoke and Rotherham, so it is business as usual for staff and customers. The administration provides a period of protection while we explore options for the future of the business in the UK" said Interpath Advisory Managing Director and joint administrator Nick Holloway.The company's assets in its 2022 accounts came out to be just under £3.4 million. But at the time, it owed debtors around £5.8 million, and overall the company had liabilities of more than £2.4 million.

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Levantina Goes Into Administration

Remainder of The Body Shop Stores Saved From Closure Amid Administration Rescue Deal

in A guide for redundant employees in administration or insolvency situations Retail What Does Going Into Administration Mean?

Update as per September 2024100+ Body Shop stores have been rescued from closure following an administration rescue deal by a consortium led by Mike Jatania.Mr Jatania is known a 'Cosmetics King'. The deal came from Aurea, his investment firm.Reports share that this new deal will ''steer the Body Shop's revival and reclaim its global leadership in the ethical beauty sector it pioneered''.Sky News report more.End of February 2024According to reports the Body Shop may be using a CVA to exit from administration in order to continue trading.  The administrators have drawn up plans to discuss rent cuts with landlords.  Read our page on administration followed by CVA 20th February 2024The Body Shop has announced that it will close approximately half of its stores, starting with 7 that will close immediately today; Surrey Quays (London), Oxford Street (London), Canary Wharf (London), Cheapside (London), Nuneaton (Warwickshire), Ashford Town Centre (Kent), Bristol Queens Road (Bristol).Along with the store closures, is the cutting of 40% of roles at its London headquarters - leaving around 400 full-time employees.The Body Shop ambassador programme is also going to close. This is the scheme were individuals sell products for a commission.Administrators say the brand's current portfolio is ''no longer viable'' after ''years of unprofitability''. The restructuring will include a renewed focus on the companies' products, online sales channels and wholesale. 13 February 2024Following the reports this weekend, administrators from FRP Advisory have officially been appointed to ''accelerate the restructuring'' of the UK arm of The Body Shop.Administrators will explore all options going forward for the business.Joint administrators, Tony Wright, Geoff Rowley, and Alastair Massey, will continue to trade the business in administration. 12 February 2024It has been reported this weekend that cosmetics retail chain, The Body Shop, is preparing to appoint administrators from FRP Advisory to its UK arm. This comes just six weeks after the chains new owner, Aurelius, took control.It is understood that the retailer experienced weak trading over the festive period and early January, coupled with having insufficient working capital.In the UK, Body Shop has 200 stores to the along with its headquarters in London -It seems unlikely that the British cosmetics, skin-care and perfume company, set up by the late Anita Roddick, will disappear from our high streets completely.  What is likely, is that there will be a focus on reducing its costs and building up a stronger online presence.  The brand still has appeal for its ethical stance and is popular with younger shoppers. Though the process of administration is being explored for the UK operations, the brands global franchise partners are not affected.In fact, very recently, parts of The Body Shop's businesses across Europe and Asia  have been sold to an unnamed family office - according to Retail Week.Will we see The Body Shop appoint administrators? Will there be a change in owners for the fourth time?It is interesting to see that the company has not opted for a Company Voluntary Arrangement.  This may be due to the fact that its problems do not stem from a number of poorly performing stores (which can be exited in a CVA) but to more widespread difficulties.  It is also likely that the owners have security over the assets of the brand.  If they have security then they can appoint administrators and are first in line for any payouts.This news piece will be kept up to date in accordance to current events. You can find out more on this story from BBC News. 

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Remainder of The Body Shop Stores Saved From Closure Amid Administration Rescue Deal