Jobs have been saved at a Cumbrian retailer after a director of the company acquired the business in a pre-pack deal.
Ambleside-based Lakeland Leather, which entered administration in June, has been bought by a newly formed business set up by commercial and operations manager Martin Foster. Unsecured creditors now stand to receive about 25p back for every £1 they are owed.
Andrew McTear and Chris Williams of McTear Williams & Wood were appointed joint administrators of Lakeland Properties Ltd, which traded as Lakeland Leather, on 13 June 2014. The majority of the business and assets were sold to Felldale Ltd on the day of their appointment, a new report has revealed. The final consideraion is dependent on stock values and potential retention of title claims, but is estimated to be about £1.4m. It will be paid in monthly instalments from September. Foster joined Lakeland Leather in early 2014 and, according to Companies House records, is the sole director and shareholder of the purchaser. However, it is understood he will work with Lakeland director Richard Standring. Lakeland Leather was incorporated in 1992 but has been trading since the 1960s. It operated from 22 stores prior to entering administration and had historically been profitable. Its portfolio included stores in Manchester, Chester, Kendal, Southport and at Cheshire Oaks. But the company posted a loss in the year to 28 January 2009 and although it was profitable the following financial period, it has returned consistent losses in recent years. In early 2014, the group entered into a 'Time to Pay' agreement with HM Revenue & Customs (HMRC) but defaulted on payments. A cash shortfall was also forecast so the retailer met with advisers to discuss a sale or strategic investment. During planning meetings, Foster indicated he would be interested in completing a pre-pack purchase. The administrators said this deal was in the best interests of the company and its creditors as to market the business and assets would have taken at least a month and led to more losses. It also preserved jobs and stores. The administrators said two of the best performing stores are leased from the pension scheme of the Standring family, who would not have been willing to agree an assignment to another party or grant new leases. As a result, administrators were apppointed and the pre-pack deal was completed.
According to a report prepared by McTear Williams & Wood, the sale has ensured secured creditors, estimated to be owed £1.41m, will be repaid in full. Unsecured creditors are owed £3.2m and although they are set to receive 25p in the £1, there is expected to be a £2.4m deficiency.
22 July 2014
28 July 2014