The scandal of one of the UK’s household names asset stripped by the likes of this man Rob Templeman; plus creditors left with a £50m bill from builder Simons; and more news of administrations and company collapses

'It’s a Wild West out there' is the view of ICSM Credit’s CEO Ian Carrotte when he refers to how firms are folding and administrators are processing their assets.

“I can honestly say that with 40 years of experience of the market I have never seen such a free for all as firms collapse,” he said. “perfectly sound businesses are being forced to the wall as their customers are driven away by the Covid-19 restrictions. The pirates are moving in picking off the assets and stripping companies to make a quick dollar.”

Suppliers left with headache

Building’s Dave Rogers has reported how unsecured creditors are claiming £50m from the collapsed construction company Simons that collapsed last October.

He reported: “Unsecured creditors have sent in claims of more than £50m to the administrator of collapsed contractor Simons Group. FRP Advisory was appointed administrator to the 75-year-old firm at the end of last October but this has now been extended until October 2021. The firm collapsed last October after 75 years in business

“In a progress report, FRP said it had received claims from unsecured creditors totalling £50.3m. A number of Simons’ 124 employees have sent in claims totalling nearly £13,000 for missing holiday pay. FRP said that it expected the preferential creditors, who include the employees, to be paid in full adding that unsecured creditors will get something back but was unable at the moment to say how much.”

Gloucester parcels

Motor Transport’s Chris Tindall has reported on the collapse of Gloucester parcels firm Lima after business dried up in the pandemic.

He reported: “Gloucester-based parcel delivery firm Lima Logistics collapsed into administration as a direct result of the Covid-19 pandemic, its administrators have said. In a report to creditors, Nicholas Simmonds and Chris Newell at Quantuma Advisory said the coronavirus and the subsequent lockdown earlier this year had consequences on the company that lasted much longer than anticipated.

“It was incorporated in 2015 and had grown into a £300,000 turnover business before moving into premises in Churcham and then joining Pall-Ex in February.”

Management retail move

The high street lost a massive chunk of its footfall when the Edinburgh Woollen Mill Group hit the buffers this year. However a management buy-out of one of its brands may give hope to some of its customers.

Business Sale reported: “A management buyout (MBO) bid has been submitted for Edinburgh Woollen Mill Group (EWM) retailer Peacocks by EWM’s head of ecommerce Josh Lowes. Peacocks went into administration last month alongside fellow EWM retailer Jaeger and is one of several EWM brands that is seeking a buyer. The group has been hit hard by the impact of COVID-19 on the UK high street, warning in October that it was close to collapse. Since then, several of its stores have gone into administration. Buyers are being sought for brands including Peacocks, Jaeger, Edinburgh Woollen Mill, Ponden Home and, most recently, Bonmarche.”
The website dedicated to administrations and the sale of firms said the MBO proposal was submitted to administrator FRP Advisory by Lowes in conjunction with private investor Phoenix Wales.

They said: “The bid aims to acquire the full company, including all 470 UK stores and concessions, and would aim to improve its digital offering and ‘rejuvenate the in-store experience’. The proposal also stated that, if successful, Cardiff-based Peacocks would keep its base in South Wales.”

Ian Carrote of ICSM Credit said it sounded positive but asked if the MBO would honour invoices of suppliers to the original company or simply wipe out the debts.

Wind farm fail

The energy firm BiFab has fallen into administration after the Scottish government pulled the plug on propping up the company.

Business Sale reported: “Fife-based renewables engineering firm Burntisland Fabrications (BiFab) has gone into administration after the withdrawal of financial support from the Scottish government. Canadian firm DF Barnes acquired BiFab in 2018, but said the company was not ‘investable’ at the time, with the Scottish government instead acting as primary financiers for the company. The government had bailed out the company in 2017 when it ran into ‘critical cash problems’ and remained a minority shareholder.”

Ian Carrotte of ICSM said he understood that last week, Scottish Economy Secretary Fiona Hyslop told MSPs that nationalising BiFab had been ruled out as Hoolyrood had already dished out £52m to keep the firm whirling. He said the 500 employees faced the dole and a project that should have been part of the Caledonian nation’s energy future had ended.

In its most recent financial report, to the year ended December 31 2018, BiFab reported turnover of £18.5 million, down from £101 million in 2017, however its £4.6 million loss for the year was an improvement on a £48 million loss the year prior. At the time, the company had fixed assets of £370,620, current assets of £5.6 million and net assets of £1.9 million.

Nemesis of Debenhams

Ruth Sutherland of the Daily Mail singled out Rob Templeman as the man who was accused of stripping the lucrative assets of ailing department store Debenhams.

She implied he had no interest in the long term future of the retailer but  saw it as a chance to extract as much cash from the company as possible before its end.

She wrote: “How much is this man to blame for demise of Debenhams? The 242-year chain never recovered from the brutal private equity era. He is not a household name like Sir Philip Green. Nor has he, like the Topshop tycoon, had the dubious distinction of having a film entitled 'Greed' based on his life. Indeed, in the acres of coverage on the collapse of Debenhams, the name of its former chief executive Rob Templeman has barely been mentioned.”

The Daily Mail journalist wrote her piece before the potential intervention of Mike Ashley and the Fraser Group who are in talks with the administrators with a view to buy a number of the stores.

She wrote: “Debenhams is the most devastating case so far of a retailer that has suffered at the hands of vulture capitalists. Others to have experienced their aggressive business model include Maplin and Poundworld. Private equity has infested the British high street for two decades, with stores often ruthlessly milked for profit then put into administration. Restaurants and pub chains came in for similar treatment. One of the most toxic episodes until Debenhams was the case of Comet, once a big name electrical goods chain.

“It was taken over by private equity buyers in 2012 for a token sum. Months later the company, whose history dated back to the 1930s, collapsed with the loss of 7,000 jobs.  The estimated cost to the taxpayer was nearly £50million in lost tax revenues and redundancy payments.”

Her concerns were echoed by Ian Carrotte of ICSM Credit who said that ‘sharp practice’ left the taxpayer with a large bill and that greater regulation was one option.

Templeman made millions from Debenhams more than 10 years ago when he was in control of the retailer but according to the Daily Mail he loaded with more than £1billion of debt while takin a fortune in pay and benefits. He had claimed he was turning Debenhams into a lean, mean profit machine, cut costs to the bone and failed to invest enough in stores. 

The Daily Mail voiced the views of many when It said: “Retailing is not just about money. At its best, it is an art form. Whether it is an exquisite Fortnum & Mason Christmas window, or the gusto of a market trader shouting her wares, the best know it's all about connecting with customers. Our high streets would be much healthier if shops were run by shopkeepers, not cold-eyed financial engineers.”

About ICSM Credit

ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel - while at the moment there's a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach - ask for details from Paul.

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk