5 British business collapses during 2014

Caterham F1

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Formula One racing team Caterham F1 declared it had skidded into administration in October, with Smith & Williamson overseeing the process as bailiffs hit the tracks and started taking away steering wheels, pit equipment and even a test car. 

What was particularly interesting, however, was what the business did to stay afloat and repair the damage – adopt crowdfunding. The company launched a campaign on Crowdcube to get to the Abu Dhabi Grand Prix with a view to find a buyer and pay 200 staff their outstanding month’s wages with a target of £2.35m from professional investors and F1 fans alike in exchange for Caterham assets. The move was described to Real Business by Caterham Sports administrator Finbarr O’Connell as “an emotional plea to really assist the team”.

The news had generated a global buzz, but not everyone warmed to the innovation – F1 boss Bernie Ecclestone, said: “We don’t want begging bowls. If people can’t afford to be in Formula One, they have to find something else to do.” 

Not all of the money was secured ahead of the Grand Prix, but the 80 per cent raised was enough to get the team to the final race of the season. After it, O’Connell, said: “My discussions with potential purchasers are continuing and showcasing CaterhamF1 at Abu Dhabi has shown prospective purchasers the spirit and commitment of our race team which is the ‘human engine’ of the team.”

Despite that, the 230-strong employee base was made redundant a week before the Grand Prix and Caterham was accused of burying the news with the crowdfunding scheme.

La Senza

The UK franchise of Canadian lingerie firm La Senza was bought by Dragons’ Den businessman Theo Paphitis before he sold it on to private equity firm Lion Capital for £100m in 2006. Paphitis left the board in spring 2011 and shortly after in December, La Senza UK had filed for administration with KPMG due to “trading conditions.” 

Kuwait-based retail franchise operator Alshaya secured an agreement to acquire the business, retaining 60 of 80 stores and 1,100 of the 2,600 staff. Seemingly it wasn’t meant to be and the trading conditions continued to put strain on the business. Alshaya now operates under the name Marnixheath, despite £100m of investment on new products and store revamps. With that, administration was declared again in July 2014 – at which time there were 55 stores in operation and 750 staff members.

PwC is handling the proceedings this time around, and joint administrator Robert Moran, said: “The challenging conditions in the UK high street are well documented. Like many other retailers, La Senza has been hit hard by the difficult economic environment and a slowdown in consumer spending. The administrators are continuing to trade the businesses as normal for the time being whilst discussions take place with interested parties in respect of a sale. We welcome any approaches to purchase all or part of the store portfolio. Staff have been – and will continue to be – paid for their work.”

Jane Norman

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Like its fellow female-focused retailer La Senza, fashion chain Jane Norman also filed for administration in summer of 2014 for the second time, after an original filing in June 2011. The survival strategy the first time was supported with The Edinburgh Mill Group, which bought the brand and 33 stores, but the secondary collapse has been put down to the company’s limbo-like positioning as “not cheap and not upmarket”.

It’s a stark turnaround from its performance in 2007 when it reported a 45 per cent year-on-year increase in profits and a plan to open 100 new stores, having already doubled to 116 from the previous year. This year Grant Thornton was appointed to oversee the restructuring in June, at which time Jane Norman was the employer of 160 members of full and part-time staff in 24 stores.

Partner Les Ross, said: “We intend to continue trading the stores for as long as possible with a view to achieving the best outcome for all concerned, in particular those people based in the stores. It is likely, however, that store closures are inevitable.”

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