FOLLOWING THE COLLAPSE of Focus DIY, administrators from FRP Advisory have been called to distributors Proteam UK.
Jason Baker and Geoff Rowley, partners at FRP Advisory, were appointed yesterday to the Tonbridge-based company, which supplies products to DIY stores and supermarkets.
Commenting on the reasons for the administration, Baker (pictured) said: "A large proportion - approximately 35 percent - of Proteam UK's sales came from Focus, the DIY chain, which itself entered administration in May 2011.
"As a result of the loss of sales from this major client, Proteam UK experienced serious liquidity problems and was unable to continue to trade without the protection of administration."
Ernst & Young administrators were appointed to Focus DIY in May this year. They were able to sell 55 stores out of 178 to various outlets including Kingfisher and Wickes. The administrators are in discussions to close the retail chain.
FRP Advisory administrators will continue to trade Proteam UK, which has 50 staff, while seeking a buyer. There are no planned redundancies.
35% of the overall business with one customer is a lot of eggs in one basket, especially when they employ 50 staff and only have a turnover of GBP20m. I heard that Proteam had some form of written protection against the risk of Focus going under....obviously not !! So what will happen is Alastair will probably buy the company back for a pound under a new name such as Proteam Holdings Ltd, buy the stock back for half its value, continue with zero debts and continue to trade as normal. The only ones to lose out will be the Investment Company that bought Proteam out from Alastair a few years ago.....Alastair is one smart cookie......well done !!!
Posted by: Charles White, 17 Jun 2011 | 02:58
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