Crisis-hit store given new boost
AN ailing Scarborough-based gadget and toy retailer has been bought out of administration.
The Discovery Store, which had an outlet in the Brunswick Centre, closed down in January after being hit by cash-flow problems.
It went into administration after owing more than £800,000 in taxes.
At the time of the closure, the Evening News understood The Discovery Store owed £50,000 in unpaid business rates to Exeter City Council, and a further sum to Scarborough Council.
However, it has now been bought out of administration by a purchasing group which includes Geraldine Jones, who is the mother of the company director of the Discovery Store and a former employee.
The business and assets were sold as a going concern last month by administrators Redman Nichols Butler, to TDS GRP for £76,000.
The deal has secured the jobs of its remaining staff.
A report from Mr Butler, a joint administrator, said: “The company had made the majority of its employees redundant prior to my appointment.
“At the date of my appointment, the company employed nine people, including the company director and shareholders.
“The company’s employees were paid monthly, but we understand they had not been paid for some period of time.
“Accordingly, a decision was made to pay staff week by week.
“However, the director and two shareholders were dismissed shortly after my appointment.”
The report revealed Discovery Group set up subsiduary companies when it opened a new retail store.
This subsidiary company occupied the store on a short-term lease and licence and the company supplied it with stock.
The report also cited the Arctic blast of winter 2010 as another factor which hindered the business.
It added: “Trading during the period 2010 to 2011 was poor due to the bad weather and macro-economic conditions.
“The internet sales suffered during this period due to the company not being able to get stock from its warehouse in Scarborough.
“The company continued to open stores during 2011 which created significant cash-flow pressures.
“Sales for the 2011 Christmas and post-christmas trading periods were low leaving the company unable to pay staff wages for December 2011 and January 2012.”