Wensum Tailoring Limited (05814165): administration
- Status
- Administration ended
- Administration began
- 2020-06-29
- Administrators
- Kirstie Jane Provan, Gary Paul Shankland
- Administrators' firm
- Begbies Traynor
- Incorporated
- 2006-05-11
- Location
- London
- Industry
- 46420 Wholesale of clothing and footwear
Why it went into administration
- COVID-19
- Supply chain disruption
- Cash flow / liquidity pressure
- Bad debts / customer insolvency
- Brexit
- Competition / price pressure
From the administrators' statement
Post Brexit, the Company suffered from currency fluctuations both in terms of Europe and Mauritius, incurring costs it was unable to pass on to the customer to remain price-competitive and ultimately, surviving with shareholder and lender support. Primarily as a result of the impact of the COVID-19 pandemic on its customers, debtor remittances were substantially lower and customers stopped taking delivery of the stocks which had been manufactured specifically for them under existing contractual arrangements. The govemment mandated lockdown in late March 2020, meant that most of the Company's customers suspended ‘their commercial activities...
The Company took similar steps to wind-down its operation and furlough its staff. Even with the cost saving measures in place, the Company was dependent on financial support from WTL- HK/Wing Thai and its longterm viability as a business was in doubt. On 8 April 2020, the Torque warehouse advised the Company that as a result of non-payment of the outstanding debt of £71K, it was exercising a warehouse lien over the Company stocks in storage and would not release any stocks without being paid all or a substantial part of the outstanding debt.
On 29 April 2020, WTL-HK/Wing Thai informed the Board (of the Company) that it was no longer in a position to provide financial support or to-continue providing the guarantee to BEAL in respect of the Company’s borrowing, on the basis that the Company was already experiencing severe cashflow difficulties as a result of delays in payments from its principal customers. By the end of April 2020 the total debtor balances due to the Company amounted to circa £1.4M (“the Book Debts’). That, combined with the UK being under strict COVID19 restrictions for an indefinite period, the Directors concluded it was unlikely the Company’ s cash flow position would improve in the immediate short term.
Administrators' statement of proposals (2020-09-01) · Companies House register