Elite Sports Group Limited (07111486): administration
- Status
- Administration ended
- Administration began
- 2022-11-23
- Administrators' firm
- Kroll
- Formerly
- LBJ Sports Apparel Ltd
- Incorporated
- 2009-12-23
- Location
- London
- Industry
- 82990 Other business support service activities n.e.c.
Why it went into administration
- Funding withdrawn / unable to refinance
- Cash flow / liquidity pressure
- Competition / price pressure
- Sustained trading losses
- HMRC / tax arrears
- Loss of a key customer, supplier or contract
- COVID-19
- Weak consumer demand
- Supply chain disruption
- Creditor pressure / legal action
From the administrators' statement
The on-set of COVID-19 led to reduction in the Company’s revenue during FY21 with a number of football matches during the 2020/21 football season being cancelled altogether or closed to the public, preventing in-person supporter attendance for these matches. This in turn affected the footfall at the retail store outlets and consequently impacted the sales at these retail stores. Despite these challenges, the Company reported profitable trading during this period with the FY21 statutory accounts showing a profit before tax
The Company subsequently benefitted from greater opportunities in the Pro Wholesale and Retail business units after two major competitors’ exit from the UK football market, with the Company winning headline contracts with two football clubs in 2020 and 2021. While these new contracts were initially profitable for the Company, they significantly increased the Company’s working capital requirements and left the business vulnerable with limited liquidity to fund day-to-day operations.
In the eight months to August 2022, the Company reported c.£1.9m of trading losses at EBITDA level. As part of this, the Company had to resort to air freighting its Pro Wholesale and Retail stock during summer 2022 (+£0.35m cost) to meet contractual supply deadlines. This further added to the operating cost, which the Company was not able to pass on to its clients, negatively impacting the margins on the football club contracts and further compounding the Company’s cash flow position.
Administrators' statement of proposals (2023-01-20) · Companies House register