Tile retailer Tile Giant was sold for a total sum of £300,000 after being placed into administration, new documents have revealed.
Neil Morley and Howard Smith, both from Interpath Advisory, were appointed as joint administrators of TG Realisations 2023 Limited, trading as Tile Giant, on 13 February 2023.
Headquartered in Leeds and operating from more than 80 stores across the UK, Tile Giant was recently acquired in January 2023, following which the new management team undertook a review of the business and as part of this process determined that there was a greater funding requirement than had been initially anticipated.
In addition, the level of creditor pressure experienced by the Company was increasing, with a number of creditors beginning to take action in relation to unpaid arrears and reducing their credit terms to the Company. These included the HRMC, owed almost £1m, rent arrears across its store network accumulating to c£1.2m and overdue trade claims of c£2.7m.
After reviewing their options, including running an accelerated sales process, the directors took the difficult decision to file for the appointment of administrators. At the time of the appointment, the company reported an operating loss of £3m in the period to 31 December 2022, while sales generated £48.7m.
Immediately following their appointment, the joint administrators sold the business and assets of the Company to two parties, as part of an interconnected transaction:
- Stiled Holdings Limited for £250,000: The sale of the trading name, goodwill and the business and assets, including the transfer of employees at 56 stores and head office, resulting in continued employment for 255 members of staff.
- CTD Tiles Limited for £50,000: The sale of the business and assets, including the transfer of employees at 13 stores, resulting in continued employment for 48 members of staff.
Under both of these sale agreements, which were interconnected and completed simultaneously, a total of 303 employees were transferred to the purchasers. However, 13 stores are not included as part of either transaction and have been closed with immediate effect, resulting in 43 redundancies.
As for creditors, administrators stated that preferential claims totalled £55,900 and suggested there may be some funds for a distribution. Second preferential claims are estimated to be around £937,000 and it remains uncertain over any repayment.
Unsecured creditor claims totalled £4.9m, which are highly unlikely to receive any dividend. It is therefore anticipated that creditors will suffer a shortfall of around £5.1m.