Due to the confidential nature of our work, we are usually unable to publicise assignments that we have undertaken as a firm. However, KRE have had a successful start to 2017, receiving press coverage on three appointments that we would like to share with you.
Stirling Ackroyd Limited
Stirling Ackroyd Limited is a prestigious chain of estate agents, operating within the Shoreditch area.
When we were engaged by the company late in 2016, their founder had recently passed away, their senior management had been dismissed and there was a winding up petition in place against the company due to HMRC arrears being in excess of £1 million. The easy solution would have been to place the company in Administration, with a distressed sale of the business. The business itself, however, was fundamentally sound and an alternative solution was sought. Despite needing to be sold, a Company Voluntary Arrangement (‘CVA’) was much less destructive to the value of the business. Furthermore, it would allow for a slow and controlled sale process.
We therefore assisted the Executors of the Estate in appointing an entire new management team and persuaded the Company’s bankers to support the strategy and won backing for the CVA from HMRC as well as the company’s other major creditors. Shortly after our appointment, the finance team walked out and we introduced Solutions 4 Business Accountants to take over the finance role and ensure that the business had the necessary working capital to trade whilst being marketed for sale. Spectrum Corporate Finance and the Company’s solicitors, Smithfields, both also played an extremely important part in a difficult process.
As a result, the business was sold after six months of trading at a significant premium, all employment was preserved and it is expected that all creditors will be paid in full. Our confidence in the new management was justified and the performance of Steve Wilson, the new Managing Director of Stirling Ackroyd, and his team exceeded all expectations.
Louche London, JOY
JOY is a well established chain of fashion retailers with over thirty stores in the UK. KRE first became involved as many of the stores were struggling from increased rents and rates, as well as a stagnant retail market. A Company Voluntary Arrangement (‘CVA’) was considered, however, it was deemed unviable.
The business was therefore fully marketed, despite the fact that the management were always the likely purchasers due to their integral role in the design of the company’s products. A sale was concluded via Administration to management, and they are currently trading from fourteen outlets.
This led to a significant amount of employment being preserved, secured creditors being paid in full and a small dividend expected to be paid to unsecured creditors. As described by Retail Week, this decision ‘rescued’ Joy’s, allowing it to continue being a working business. Pre pack sales understandably have many critics, however, this outcome is better than a close down.
Wheatons of Exeter
Wheatons was a long established printing business, which was struggling from over-supply in the market and falling order numbers. As Administrators, KRE were faced with a difficult decision. The options were either an immediate shut down, which would have impacted badly on debtor realisations, or a limited trading period, which would allow time to explore whether a buyer could be found for the business. The latter was pursued and trading was successful with a healthy trading profit, however, there was no appetite for a buyer of the business. Regretfully, Wheaton’s closed down and all employees were eventually made redundant. The trading period, however, ensured a solid debt collection with both secured creditors being paid in full, as well as a possible dividend to unsecured creditors.
We hope that the above demonstrates the positive approach to all situations by KRE and a wide breadth of experience across many industries.
For any further information on our services please do not hesitate to give one of us a call or visit our website: www.krecr.co.uk
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