Stockport-based textiles supplier J.T. Griffiths & Co. Ltd was sold for £90,000 in a pre-pack deal after entering administration.
J.T. Griffiths & Co. Ltd, which has been trading since the 1950s, fell into administration after experiencing difficulties following a reduction in turnover, mainly due to a decrease in trade during the Covid-19 pandemic.
Sales dating back to the year ended 2018 stood at £6.1m with a profit of £119,000. The following year saw an increase in both turnover and profit to £6.5m and £126,000 respectively. However, for the year ended 2020, sales dropped 12% to £5.7m with the business also reporting a loss of £83,000.
Following the reduction in trade, its funding facility provider Skipton restricted funding due to the company falling behind in its obligations to HMRC, owing debts of around £1m.
Mike Dillon and Hilary Pascoe, both from Leonard Curtis, were appointed as joint administrators of the business on 7 September 2022 and after a short marketing period, the company and assets was sold to a connected party, Porrison Harridge Ltd, a business with common directors and shareholders.
Within the marketing period, 13 expressions of interest were made alongside Porrison Harridge Ltd. Four submitted a non-disclosure agreement but didn’t materialise into any offers, which left the only offer on the table by Porrison Harridge Ltd on 14 September 2022.
The sale for the business and assets totalled £90,000 and was completed on 22 September 2022 and was broken down into six instalment payments of £15,000, with the concluding payment scheduled for 22 February 2023.
The sale has seen 22 jobs saved, with the purchaser to continue to operate its factory in Turkey, which also employs around 75 staff.
As for company creditors, administrators said that it expects preferential creditors to receive a distribution, while secondary preferential, the HMRC, and unsecured creditors are not expected to be repaid. Within these, the HMRC is owed £1.3m, trade claims valued £823,000, while a loan of £276,000 is also owed. It is understood that creditors will suffer a shortfall of £2.4m.
Commenting on the sale, administrators said: “J.T. Griffiths & Co. was a well-established business which had historically traded profitably. Recent reduced trading activity had put the business under significant cash flow constraints, and it was unable to keep up with payments due to creditors.”
Robert Griffiths, director of Porrison Harridge Ltd, added: “The sale has allowed us to continue trading and to maintain continuity of supply to customers. All staff remain in place providing the same high-quality service our customers have come to expect.”