School kit shop closed owing £500k
UNIFORM SHOP WHICH COLLAPSED INTO ADMINSTRATION LEAVING CUSTOMERS WITHOUT CLOTHING AND SOME STAFF UNPAID HAS BLAMED COVID FOR HAVING A HUGE IMPACT ON ITS TRADE –
A SCHOOL uniform shop which collapsed into administration leaving customers without clothing owed more than half a million pounds to creditors, it has been revealed.
Burton-based Clothing 4 Schools, which was at Anglesey Business Park, closed suddenly last year, leaving some parents without school uniforms in time for when their children began the September term.
According to documents filed by its administrators some of the blame lay with the store having to shell out money to remain Covid compliant, coupled with a lack of trade caused by nonessential shops, such as clothing ones, being forced to close during lockdown.
Clothing 4 Schools went into administration and Birmingham-based Greenfield Recovery was appointed as administrators at the end of October last year.
Documents now filed with Companies House say it owed £562,865 to creditors when it closed.
Included in the total was £37,301 owed to 14 employees, which had to be paid by the Redundancy Payments Service.
It included unpaid wages, accrued holiday pay and redundancy pay.
The firm, which also had shops in Chellaston in Derby , Stourbridge in the West Midlands, Swadlincote and Tamworth, was established in 2011 and started trading in 2014.
In the documents, the administrators have said that they “anticipate that there will be sufficient funds to enable a modest distribution to be made to preferential creditors”.
They added that based on current information and “due in large part to the disappointing realisation for the company’s owned stocks, we do not anticipate the payment of a dividend to the floating charge-holder or the nonpreferential unsecured creditors”.
Clothing 4 Schools started trading in 2014 with its store in Burton, being the first to open. Having successfully traded locally, it opened a store in Tamworth and soon another store. As its reputation increased and trading appeared steady and consistent, four then five stores were added by 2019 as the business grew.
The documents went on to say: “2018 proved a challenge with the Burton store and the decision was taken to invest in a new, much larger store with centralised operations, for 2019.
“While the new store proved successful, the level of investment required was very significant.
“As such by the time such a further significant level of investment was required for all of the stores to enable them to be Covid compliant the cashflow was severely affected.
“This was compounded by the considerable lack of trade over the period, with forced store closures and also much reduced trade when the lockdown was eased.
“The level of overheads across the retail business was clearly not sustainable and the trading was clearly not going to be anywhere what had been regarded as normal and at the levels required.
“The decision was taken, in light of what was clearly an ongoing pandemic, to seek professional advice, which led sadly to the decision to close the store retail business.”
The Burton Mail revealed last year that calls to the store went unanswered from customers when it closed suddenly.
One parent who was affected was Eddie Young, who was left without a blazer he had paid for his son.
Mr Young said there were other parents in the same boat as him as his calls to the shop went unanswered when he could not get his order. He paid for the clothing on his card and was able to get his money back after contacting his bank, he has said.
But there were other parents who paid for their children’s clothing with cash who were left without their items and out of pocket.
They were later given instructions on how to apply for a refund.