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Monday, 1 August 2011

The Loft Shop in Liquidation ( update )

Update 31st August 2011:  Since posting this blog, as below, on the 1st August 2011 it appears that The Loft Shop has NOT gone into liquidation, but administration.  However, liquidation may follow.  The employees of the the business had been made redundant with liquidation given as the reason. As such the local press believed this also to be the case.

We said;

The Loft Shop that operated out of the Lineside Industrial Estate in Wick (East Sussex) has gone into liquidation.  The firm had 19 stores across the country.  Their website is still in operation and the directors have opened a new business doing the same thing in Chichester.  This has angered many of the former employees as non of the former staff have been recruited at the new store.    Does this sound fair?


As is often the case many people assume some wrong doing. So lets take some of these points and explain.
A director is perfectly entitled to start a new business if he was a director of a previous company that went into liquidation.  However, there are strict rules in re-using the company name under section 216 of the insolvency act.  Basically, you can't without leave of the court, which is very rare.  This new shop uses a completely different name. 


The director claimed that he had put in £350k of his own money to keep the business afloat after the credit crunch otherwise jobs would have been lost sooner.  - This is something we do see and it will come out in the liquidation report how much he has put in as a creditor of the business.  A liquidation report will be sent to the employees by the insolvency practitioner so they will be able to see for themselves.


With respect of the website it is often the case that this remains in place as it is an asset of the company that can be sold in order to try and get some monies for the creditors.  In this case it looks as if the website has been bought by the new company, Kaysted Ltd, that is run by the former directors.  They will have had to pay a fair market price for the website that would have been valued independently.  However, in the circumstances it would have been lower than if the business was trading profitably.  Perhaps it wasn't so crucial after all.

8 comments :

  1. Hi Keith
    Very good article on The Loft Shop above, but as a former employee of the above company for many years i too was made redundent when the directors informed us the company was going into liquidation on Friday 24.6.11 with the loss of all jobs know full well that they were going to start trading again on monday as Kaysted Ltd t/a The Loft Shop leave a bitter taste. Not only have they lied about their conducts but they have also retained some of there staff despite telling us all were going. The liquidation is a sham and need careful investigation by the receiver. i understand some employees have reported this matter to the employment tribunal to bring Mr Stedman and family to justice. They have also been reported to the local press and as we speak the website is still trading as The Loft Shop Ltd and has been since 24.6.11.DISGUSTING

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  2. KaySted! What a joke! Anyone of my former colleagues will get how sick that name is.

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  3. some of the above written by rob moore is incorrect. under the rules of tupee a new company cannot trade using a known trade name of the demised company, wihout taking on the liability of the demised company. this new company is trading as kaysted t/a LOFT SHOP, in a hope to mimic the previous company and take on the good will assosicated with it, this is illegal. To my knowledge the employees are perfectly within their right to make a claim for loss of entitlement from the new company if that new company tries to mimic the old company i.e calling themselves loft shop again and trading in the same markets with the same products and same website, however as far as I am aware this needs to be done fairly quickly (3 months from start up) using a good knowledgeable solicitor. Lastly it is illegal for the people who ran the loft shop to pre set up a company waiting in the wings (kaysted was setup during may 2011)prior to the demise of the original company (Loft shop June 2011), as part of a plan to jump ship. if this was the case it would be easy for anybody running a struggling business to register a new one and jump to that one.

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  4. As publisher of this blog we do allow constructive comments to be published. Suffice to say these are comments made by indviduals some of whom reveal their name. regretably others use anonymity.

    The comments above do, however, contain factually incorrect statements about the Insolvency Act and liquidations

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  5. Keith, interesting that you say that factually incorrect statements are being made. I fail to see your rationale behind this statement. The loft shop did not and has not gone into liquidation. As far as I am aware it went in to administration approximately 1-2 months after it dismissed its staff unfairly without reason, thereby trying to get out of further pay due. No doubt you will be aware that The Loft Shop is being sued by a number of Claimants claiming not only 13 weeks protective award for failure to inform and consult on a TUPE transfer to its set up chichester office but also ongoing loss of earnings over and above the statutory redundancy payment. The staff should have TUPE'd across. Anything factually incorrect in these statements?????

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  6. As a former manager at The Loftshop Ltd and one on the many people made redundant in June I am in receipt of the administrators report. The company went into liquidation with a debt of £1,637,358.80.

    How can it be right in law that the directors (those responsible for its demise) can simply start a new company and pick the parts of the old one they want to keep?

    The company failed for a number of reasons but none more that the arrogance and incompetence of its directors.

    To date all fromer employees have still not received a peny in redundancy and further more are having any benefits affected as the directors of The Loftshop Ltd had not been paying their NI contributions.
    Not only are we continuing to loose money now but we had also taken a 5% paycut in order to help save the company. This saving however was spend on a new company car for the "Bosses son" to parade around in (possibly not even deaclared so he could avoid tax). On top of that instead of purchasing stock for the 19 stores to sell the directors decided to spend the money on a lavish weekend away in europe for them and 3 other employees and their partners(i hope they enjoyed themselves at the employees expense).

    I would personaly advise all former suppliers of The Loftshop and any new suppliers to Kaysted Ltd to think very carefully in regards to not dealing with them in future.

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  7. I too am a former employee of The Loft Shop and I too am out of work, however, I find the above blogs incredibly offensive towards the Directors of the company to say the least. The Directors worked extremely hard to save the company over the period of 2 years, investing as correctly stated £350K of their own money in an attempt to rescue the company, however, to no avail once the current economic climate took hold. How can a company pay the salaries of 30 odd staff and 19 shop leases when there is no sales income coming in and debtors are refusing to pay?! This they tried to do for several months but eventually something had to give. All staff were paid up to date on the day that the company went into administration and will by now, should they qualify, have also received their payments from the government redundancy office which I should imagine in a lot of cases would be quite substantial. The Directors, trying to salvage whatever they can out of the business and their massive investment have set up a company with just themselves as employees - they are just trying to earn a living - wouldn't anyone in that situation?! The people above who have written the above blogs I believe have hidden personal agendas (which obviously they won't reveal) and very unsubstantiated personal greivances (which they are again highly unlikely to reveal!) hence the content and tone of their blogs. It is an incredible shame that the company came to an end as the majority of employees did indeed work hard for many years but unfortunately this is the economic climate we are living and working in. I suggest they spend their time better moving on in life instead of wallowing in bitterness about the sad demise of a company.

    ReplyDelete
    Replies
    1. As a former Area Manager of the Loft Shop I would like to send my regards and best wishes for the future to the staff that have been badly let down by the senior team at the Loft Shop. I to lost my job some 6 years ago. After hitting our year end targets the other area manager and i were dismissed as they could no longer afford to keep us on. There was very poor fiscal control at the loft shop not helped by the continual gossip mongering of Darren the Sales Director. He continualy abused his position by making fun of the Stedmans his favourite past time was comparing them to the Simpsons. He also frequantly discussed a takeover of the Stedmans under minining their position. Whilst I was there I introduced a staff performance review Darren took the credit for that stating it was his initiative. On top of this Darren totaly undermined the Steadmans son continualy bad mouthing him and sharing his arguments with other members of staff.
      Is it a suprise that The Loft Shop went under I say no the writing was on the wall many years ago.
      I have a more stable life now working for a blue chip company and I am glad the Loft Shop is now in the past. I wish all the employees of the loft shop similar success and hope they are able to put as I have the Loft Shop behind them.

      Delete

Many thanks for your comments. If you have a private business problem and you want advice give us a call on 0800 9700 539 or email me at keiths@companyrescue.co.uk. If you are a professional advisor with a troubled client, please suggest they visit www.companyrescue.co.uk or contact me as above.

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