Administrators of logistical firm Home & Retail Logistics Limited have revealed that the demise of BHS sent the business into insolvency.
Stephen Goderski and Peter Hart, from Geoffrey Martin & Co, were appointed as joint administrators on 12 July 2016 after the company experienced a substantial downfall in sales to £656,747 for the year ended 30 April 2016 from over £7m in 2015, resulting in losses of £43,431.
The decline was largely due to the collapse and eventual administration of BHS, which was the company’s largest and most significant client, undertaking around 600 to 800 deliveries a week.
According to the report filed on Companies House, Home & Retail Logistics explored other avenues to cope with the loss but was unable to secure new clients due to the ‘lack of storage facilities’ and the ‘inability to purchase new vehicles’ through lack of funds and was placed into a Creditors Voluntary Liquidation.
The business faced increasing pressure from HMRC, racking up a bill of over £900,000, whilst owing other trade creditors more than £365,000. Pulse Cashflow Finance Limited was a secured creditor owed £449,447 and is likely to receive full repayment from the recovery of the businesses book debts, which stand at £788,856.
It is estimated that a shortfall to unsecured creditors totals £1.5m, despite an estimated surplus of £598,812 being made available.
Since the appointment, administrators indicated that the business and certain assets of the company were sold to European Furniture Promotion Ltd, an entity shared with common director of Home & Retail Logistics Tim Hobbs and other common shareholders Modestas Kuzas and Shaun O’Donovan for a figure of £135,000, with £120,000 representing its vehicle assets.
Within the terms of the sale, four payments of £33,750 are to be paid before 14 April 2017, with the first already satisfied and the second due on 14 October.
The firm’s 180 employees were transferred to the purchaser at the time of the acquisition.