The second-hand car supermarket chain which operates 10 across the UK, has gone into administration. Daniel Smith and Joe McLean from Grant Thornton have been appointed administrators to the companies CC Automotive Group and UK Car Group, which trade as Carcraft.
A management buyout was arranged between Carcraft’s founders, the McKee family, and the CEO (backed by Apollo Ventures) for an undisclosed sum in April 2014. According to reports, Carcraft has been trying to sell the business since February this year. Over the last few years, the company has recorded losses of around £8 million per annum. Due to tough competition, stricter regulations, lack of financial backing and high overheads, the company has been struggling for a while.
Smith commented, "With great regret a conclusion was reached that it is no longer viable to keep Carcraft in operation. In order to prevent further losses it has been agreed with management and creditors to cease operations with immediate effect".
"Carcraft will retain a skeleton staff to assist with the realisation of assets. In the event there are any approaches from interested parties post appointment we will react to these accordingly".
"It is our intention to explore with an alternative provider whether they could provide the roadside assistance element of the DHP cover at a favourable rate to former customers."
Staff were told the company would cease trading today (Thursday), resulting in 500 redundancies.
Carcraft's financial sister company, All in One Finance Ltd, is expected to go into administration shortly after the FCA provides clearance. The Financial watchdog regulates the company.
Customers who have MoT, servicing, warranty or roadside assistance will now not be covered. If you need to contact the administrators, there is a helpline - 0800 923 9495. Customers who were in the process of buying a car or those who have a Drive Happy Plan should email email@example.com.
If you are an employee of the business, please listen to the video below as it will tell you your rights as an employee of an insolvent business. There is a link at the end of the video to the Government website which expands further on what you need to know. We are not involved in the administration and questions should be directed to Grant Thornton who are handling the case.
Our infographic below demonstrates the order of priority when a company goes into administration. Creditors include employees, suppliers, HMRC and customers among others.