Our client was a retail outlet specialising in women’s clothing based in Wigan. In its first few years of trading, things went well. The number of shoppers coming into the shop increased year on year, as did the turnover and profitability of the business. These good times continued for the first few years and then things started to go wrong.
An ex-employee of the company decided to set up their own business, in direct competition. They approached the staff of our client and managed to lure them away to go and work for them. The two companies then became embroiled in a highly competitive battle – all of which cost our client a considerable sum of money.
Further troubles were in store the following Spring when a successful, well-established market chain opened a shop in Wigan town centre. This was another direct competitor for our client, and they found it increasingly difficult to compete with the low prices this other store was able to charge.
As if things weren’t already difficult enough for our client, it was then forced to move premises because of a redevelopment programme which was taking place at its existing site. The move cost a considerable amount of money.
Then, to make finances even tighter, the rent and rates at the new premises were higher than they were at the old one.
While all this was happening, consumer spending on the high streets in general had taken a severe downward turn and was having an impact on the whole retail sector.
So, with revenues down and costs up, the company found itself in severe financial difficulty. Drastic measures were needed if the business was to survive and the director made a capital injection into the company.
It was soon clear, however, that this measure was not enough to keep the company as a financially viable concern.
The director decided to cease trading, and he contacted his Accountant who directed him to Clarke Bell. It was immediately apparent that the company was insolvent and should be wound up for the benefit of all its creditors. The Creditors’ Voluntary Liquidation (CVL) process was the best option for the company to take, as it dealt with the business debts and fulfilled the director’s legal obligations.
The director said:
“The business was making a loss, sales were down and the bills kept coming in. By winding up the company, Clarke Bell was able to put an end to my worries.
Now I can put this painful episode behind me and move on.”