Betterware goes into administration soon after Kleeneze

Published on : 17th April, 2018
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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

https://teams.live.com/meet/9352274176003?p=g22UYi3qTLiCGvOSRa

Contextual Bridge: What Administration Means for You

While this news develops, here is a quick guide to the legal realities of the administration process.

The Process: Administration is a legal “moratorium” that protects insolvent companies from creditor action. Licensed Insolvency Practitioners take control to either rescue the business or sell its assets to achieve a better result than immediate closure.

Who gets paid? There is a strict legal queue. Secured lenders (banks) and “preferential” creditors (employees and HMRC) are paid first. Unsecured creditors, including trade suppliers and customers, are at the back of the line and often receive nothing.

Employees: Redundancies often occur in the first 14 days. After this window, the administrator “adopts” remaining contracts, making ongoing wages a priority. Unpaid redundancy or notice pay can usually be claimed through the government’s Redundancy Payments Service.

Suppliers & Customers: Suppliers should negotiate “pro-forma” (upfront) terms for any new orders. For customers, gift cards and deposits are rarely honored. However, if you paid over £100 via credit card, you may be able to claim a refund under Section 75.

Written ByRobert Moore

Insolvency Advisor & Content Lead

+447584583884

Rob has spent over twenty years on the front line of the UK restructuring sector, acting as a trusted first point of contact for many worried company directors. If you are facing aggressive creditor pressure or dealing with bailiff threats, Rob can talk to you through your options clearly

Rob is now working with the Board at RMT to develop strategic marketing programmes to support the business plan and drive more company rescues.

Robert Moore