A change in consumer buying habits impacts negatively on turnover

The background
‍This Company sold photographic equipment and accessories and provided a photographic service. It was a family run business employing a number of staff across two premises.

The Company had performed reasonably well for several years, turning a small profit. However, customers online shopping habits coupled with the onset of the covid 19 pandemic led to a decrease in footfall. Ultimately, turnover was in decline.

The impact of Brexit and covid 19 were felt by the company and business almost dried up. The directors could see that even when covid restrictions were lifted, that trading would never be the same as pre-pandemic levels.

‍What happened next?
‍The directors discussed their financial situation with their accountant who in turn referred them to Even Keel Solutions and its licensed Insolvency Practitioner, Dorothy Brown.

As a result of that conversation, it was decided that the Company would benefit to continue to trade over the ‘golden month’ of December. This spike in turnover would benefit the creditors as a whole in the longer term.

The Company then ceased to trade in early January, with unfortunately all staff being made redundant. The directors either retired or found employment elsewhere.

Even Keel Solutions worked with the company directors to value and sell the business assets, in order to achieve the best possible return to the creditors.

The directors then decided that the best possible way forward was to place the company into liquidation, with which Even Keel assisted.

The end result
‍It was extremely sad for a company who had traded for 17 years that it had to close due to insolvency, but the directors were very unhappy and had no appetite to continue running the business in such stressful times.

One of the directors recently fed back that they were relieved to have made the decision to cease trading prior to the steep rise in cost of living and fuel as it would have caused further distress at an already difficult time for them.

Dorothy Brown comments “This company did the right thing from the outset. They knew they were struggling and rather than bury their heads in the sand and take no action, they sought professional advice from their accountant, who then referred them to Even Keel Solutions as licensed Insolvency Practitioners. It was a tough decision for them to make, but had they waited longer to make it, they would have faced untold amounts of stress and further financial difficulty as the economic issues developed further in the UK throughout 2022.”