In February 2003, Alan Tidswell established Sheds of Distinction Limited. The company specialised in the manufacture and supply of sheds, play-houses and summerhouses. It operated from premises in Eccles (Manchester) and focused on supplying high quality, handcrafted products direct to the general public.
In its first year of trading, the company achieved a satisfactory level of turnover and managed to generate a profit. Mr Tidswell was happy that his decision to focus on the top end of the market was proving to be successful. He had found a profitable niche in a market place where the competition predominantly concentrated on providing cheap, lower quality goods.
The business continued to prosper in its second year of trading, helped by a successful advertising campaign, as well as positive word of mouth and customer recommendations.
Problems began, however, when a retail park was developed in Eccles, near the company's premises. In the park was a major, national retailer who was supplying similar products to Sheds of Distinction but at much lower prices - albeit of inferior quality. Sheds of Distinction could not compete with these lower prices, but hoped that there would be enough customers who would still prefer to buy their own, superior products.
However, at this time there was also a considerable down turn in consumer spending as personal debts continued to rise and people were forced to curb their out-goings.
The combined effect of these factors meant the business suffered a rapid downturn in trade. The company decided to continue trading through the Easter period, however, as this was traditionally their busiest time of the year. Unfortunately, the necessary increase in trade did not materialise and the company was left facing severe cashflow problems, with a bleak future ahead of it.
A few months after Easter, Mr Tidswell decided to cease trading and dismiss all his employees. His Accountant recommended he approach Clarke Bell who promptly placed the company into Liquidation.
John Bell of Clarke Bell:
"Here was another example of a small retailer being unable to compete with a major retailer while consumer spending was at a real low. Alan was left with little alternative but to liquidate the company."
Alan Tidswell said:
"The combination of a major competitor opening up nearby and the down turn in consumer spending made it impossible for us to make any money.
"Thankfully, Clarke Bell knew how to get me out of the mess I was in."....
