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£1.4m losses reported for Haskers
Published on: 10 October 2007
Portland Business Recovery is today sending out information to the 500 creditors of Haskers & Sons Limited, setting out the results of their enquiries into the company's financial position following their appointment as administrators; the total losses are estimated to be £1.4 million.
The report concludes that the company had incurred significant losses as a result of a rapid decline in sales which, at their peak in 2005, reached £3.7million. However, in the period leading to the administration, sales had slumped to £2.4m. In the meantime, the directors had tried to reduce costs and injected their own money into the company in an attempt to reverse the decline.
The total overall estimate of losses includes £550,000 due to the parent company, which is also in administration, and £59,000 owed to the directors. The customers who had paid deposits are owed £130,000 - although those who paid their deposits by credit card are likely to be able to recover their losses from their credit card company.
Other creditors include £140,000 owed to the 23 staff in respect of redundancy pay and notice, although Portland reports that most of those debts will be paid under the government's emergency fund for employees of insolvent companies, or be reduced as a result of the employees obtaining new jobs.
The suppliers were owed a total of £430,000, but this will be reduced as the majority of the stock held by the company was still owned by the suppliers and, since their appointment, Portland has been liaising with them to confirm legal ownership and arrange the return of the stock.
Carl Faulds, Managing Director of Portland Business Recovery and one of the administrators, said: 'This is a sad case of a long-standing locally-owned business not being able to compete against the national chain stores. The directors are devastated at having seen the family business fail and are shocked by the level of the final estimate of losses. One of the problems with this type of business is that it is like a runaway train, you can see that losses are mounting up, but it is difficult to react and change direction quickly; when you do eventually hit the buffers, the consequences as we have seen are dramatic. The next stage in the administration will be to consider the conduct of the company's management and, if appropriate, submit a report to the DTI.'
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