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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CTD Tiles goes into administration and closes 56 of its outlets.The company's administrators stated that 268 employees were laid off as a result of the failure.Despite the huge number of retail closures, rival Topps Group purchased 30 CTD Tiles locations and two distribution sites in a rescue plan.Topps Tiles has purchased CTD Tiles' brand and intellectual property for £9 million from administration.The tile expert has purchased the supplier's brands, which include CTD Tiles, CTD Trade, and CTD Architectural Tiles, as well as 30 retail outlets, chosen inventory, and all related intellectual property.Topps stated that the retailer is "complementary" to its other businesses and that the acquired stores and assets provide it with "the opportunity to make a meaningful entry into the housebuilder segment and expand its existing share of the architect and designer segment".Topps bought 30 branches that generated £20 million in sales for the fiscal year ending June 2024 and will continue to trade under the CTD brand name. Why didn't Topps Tiles buy the company in a Pre Pack Administration? A pre pack administration sale is possible in these circumstances but the downside is that Topps would have had to take on all the employees via a TUPE process.  By waiting until the administration was started they were able to pick up the assets they wanted.  CTD might have been able to use a CVA to reduce stores but without knowing the make up of the creditors it is difficult to say.  If the business was simply not viable or had significant secured lenders then an administration would have been the correct procedure.If you have purchased goods from CTD then see this page on your rights Below is a full list of the stores which have been immediately shut and those which have been saved: 56 store closures: Aintree, Liverpool Ashford, Kent Aylesbury, Buckinghamshire Basildon, Essex Blackpool, Lancashire Bolton, Lancashire Brierley Hill, West Midlands Cambridge Central, Cambridgeshire Canterbury, Kent Carlisle, Cumbria Chelmsford, Essex Chester, Cheshire Colchester, Essex Coventry, Warwickshire Cricklewood, Greater London Croydon, Greater London Denton, Greater Manchester Derby Ascot Drive, Derbyshire Dundee, Scotland Eastbourne, East Sussex Exeter, Devon Falkirk, Scotland Gateshead, Tyne and Wear Glasgow Helen Street, Scotland Hanwell, Greater London Harlow, Essex Huddersfield, West Yorkshire Ipswich, Suffolk Kilmarnock, Scotland King’s Lynn, Norfolk Leeds, West Yorkshire Lincoln, Lincolnshire Livingston, Scotland Maidstone, Kent Newcastle North Shields, Tyne and Wear Newcastle West Kingston Park, Tyne and Wear Northampton, Northamptonshire Peterlee, Scotland Plymouth, Devon Portsmouth, Hampshire Preston, Lancashire Rochdale, Lancashire Rotherham, South Yorkshire Slough, Berkshire Southampton, Hampshire St Albans, Hertfordshire Stirling, Scotland Stratford Upon Avon, Warwickshire Sunderland, Tyne and Wear Sutton Coldfield, West Midlands Swindon, Wiltshire Tonbridge, Kent Uxbridge, Greater London Wembley Stadium, Greater London Weston-Super-Mare, Somerset Whetstone, Leicestershire  30 stores rescued by Topps: Aberdeen, Scotland Basingstoke, Hampshire Birkenhead, Merseyside Cambridge Bar Hill, Cambridgeshire Chichester, West Sussex Coatbridge, Scotland Coulsdon, Greater London Crawley, West Sussex Darlington, County Durham Dorking, Surrey Edinburgh Seafield, Scotland Edinburgh Stenhouse, Scotland Fakenham, Norfolk Farnham, Surrey Glasgow London Road, Scotland Hampton, Greater London Hull, East Yorkshire Inverness, Scotland Newbury, Berkshire Newcastle Under Lyme, Staffordshire Norwich, Norfolk Nottingham, Nottinghamshire Perth, Scotland Peterborough, Cambridgeshire Poole, Dorset Stockton, County Durham Warrington, Cheshire Watford, Hertfordshire Wimbledon, Greater London Woking, Surrey

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Laybuy, the pay now pay later firm, has collapsed into administration just days after suspending its service.  The company allowed customers to buy products online and spread the costs over 2-3 months.The company has 500,000 users operates across New Zealand, Australia, and the UK with 300,000 in the UK.The company has gone bust in New Zealand after failing to find a buyer.Sam Ballinger, joint administrator at FTI Consulting, said: "The joint administrators are currently assessing the options available to the companies and supporting the employees, merchants and other affected stakeholders through this difficult period."Laybuy is not currently accepting new transactions, however, customers should continue to make payments as normal."FTI said that further updates including those affecting customers will be shared in the coming days at www.fticonsulting.com/uk/creditors-portal/laybuy-uk.It is indeed a good idea that any customers who have bought goods using Laybuy must continue to make payments.  The administrators will pursue any customers who do not pay and non payments will affect your credit score.The company has 29 employees in the UK.It is possible that the company may be sold out of administration.  Klarna are the main operator in this market space and could be interested if Laybuy had any particular areas where they dominated.  However with 300,000 users in the UK it might be worth waiting until all those payments have been made and they simply have the technology left over.

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Update 28th June 2024 The Cazoo brand has been bought by Motors, the online market place.  However they have not bought the whole business.   Update 21st May 2024 Cazoo is expected to go into administration today with Teneo being the appointed advisors.  The notice of intention to appoint moratorium expires tomorrow and there appears to not have been a rescue or sale.   Cazoo, the online second car dealer, has filed a notice of intention to appoint administrators.  The company was at one point worth £6bn and employed 5000 people.  Cazoo was floated on the US stock market and made its founder, Alex Chesterman, (on paper at least) one of the richest men in the UK. The company boomed as it offered a platform for people to buy cars online and have them delivered to their home.  The pandemic helped their growth and the company spent millions on advertising and sponsorship deals. The company admitted last week that it was burning through £10m of cash a month and that it needed an urgent capital injection to survive. Other factors contributing to its problems has been the rapid fall in second hand car values and the slower uptake of electric cars. The company is not in administration right now but has filed an intention to appoint administrators.  This means that the company has 10 days protection from its creditors, who may be threatening winding up petitions, whilst it tries to raise addition funds or sell the business. Once that time period is up they may be able to extend for another 10 days, subject to approval by the court, but there has to be a very strong reason to do so. Check the links on the right hand side for other questions regarding companies going into administration

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29th July 2024Ted Baker has now announced that it is to close all its UK stores.8th April 2024Administrators announce that Ted Baker is to close 15 UK stores (of which ''have no prospect of being returned to profitability, even with material rent reductions") and cut 245 jobs.Of this, 11 stores will close by 19 April, resulting in the loss of 120 jobs.Then 25 roles from head office will go along with a further 4 stores, impacting the remaining 100 jobs.For the full list of closing stores:Birmingham Bullring Bristol Bromley Cambridge Exeter Leeds Liverpool One London Bridge Milton Keynes Nottingham Oxford Bicester London Brompton Road London Floral Street Manchester Trafford 22nd March 2024Teneo has been appointed as administrator of No Ordinary Designer Label (NODL) Limited - the company of which runs 46 Ted Baker stores in the UK along with a website and concessions.NODL has approx. 975 employees.Authentic Brands, which licenses the Ted Baker brand to the NODL, is in advanced discussions with potential buyers for the company.Reported reasons for the appointment of administrators are the struggles the firm faced following damage done during a partnership and a high level of arrears built up during a partnership with AARC Group. At the end of January 2024 AARC and NODL cut ties. 19th March 2024 It has been reported that Ted Baker, the clothing retailer, has filed a Notice of Intention to Appoint Administrators. This move is designed to give it a chance of recovery by protecting it from creditors legal actions for a 10 day period.  An injection of capital or a sale is hoped to be achieved during this period.A filed winding up petition (subsequently withdrawn) forced Ted Baker's hand.This latest move comes after the company delisted from the Stock Exchange and was sold to US-based Authentic Brands Group (ABG) for a knockdown price of £210m.  This follows a similar pattern to The Body Shop that was also bought out by private equity and then months later went into administration. Why don't these companies consider using a CVA to lower their debt? The likely reason is that these companies have been loaded with lots of secure debt which cannot be compromised by a CVA.  Property costs, HMRC, and suppliers are unsecured and can be bound by the terms of a CVA.  So, in essence, it wasn't expensive shop premises that have caused problems but indebtness.Ted Baker has suffered, like many other retailers, by the lockdowns, cost of living crisis and has borrowed money to try and survive.John McNamara, chief strategy officer for Authentic Brands Group, said: “We wish that there could have been a better outcome for the Ted Baker employees and stakeholders. We remain focused on securing a new partner to uphold and grow the Ted Baker brand in the UK and Europe where it began.”The company employs more than 900 staff and currently operates 46 stores across the country, as well as online and through department store concessions.There has not been an announcement on any redundancies yet.

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