PracticeAuditAlexon unit Bay Trading enters administration

Alexon unit Bay Trading enters administration

Uncertainty over Bay Trading sees auditors likely to issue an emphasis of matter statement, which contributes towards credit insurers pulling the plug on the group's suppliers. Alexon then takes the decision to place Bay Trading into administration.

Clothing retailer Alexon has placed its Bay Trading subsidiary into
administration, two days after warning that it might need to take some action
against the loss-making unit.

Administrators from Deloitte have been appointed to Bay Trading, the trading
name for Epcoscan. They intend to continue trading with a view to finding a
buyer.

In the group’s prelims earlier this week it had stated that there was
uncertainty surrounding the performance of Bay Trading going forward, and that
its auditors were likely to issue an emphasis of matter statement in their audit
report.

With this uncertainty surrounding the unit, the group’s provider of credit
insurance withdrew cover for the group’s suppliers.

The level of ‘potential drain’ on Alexon’s resources to prop up Bay trading
resulted in the administration.

‘Today’s decision, although incredibly difficult for us to make, does provide
certainty for the group. Our remaining core Alexon Brands have a strong heritage
and I firmly believe there is an exciting opportunity for them. A turnaround
plan is in place and is already delivering results,’ said Epcoscan chief
executive Jane McNally.

An emphsis of matter statement shows a warning on the health of the business
from auditors, but is considered less serious than auditors issuing a going
concern statement agaisnt a company.

Further reading:

Visit
Alexon’s website

Cattles suspend shares as annual
report in limbo

Related Articles

Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

Audit Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

1w Emma Smith, Managing Editor
PCAOB sanctions former Deloitte Turkey CEOs over altered documents

Audit PCAOB sanctions former Deloitte Turkey CEOs over altered documents

2w Alia Shoaib, Reporter
Big Four dominate FTSE 250 audit market in Q1 rankings

Audit Big Four dominate FTSE 250 audit market in Q1 rankings

3m Alia Shoaib, Reporter
Deloitte to pay $149.5m over Taylor, Bean & Whitaker audit failure

Audit Deloitte to pay $149.5m over Taylor, Bean & Whitaker audit failure

3m Alia Shoaib, Reporter
Deloitte’s audits of Hezbollah-linked bank to be examined by Dubai court

Audit Deloitte’s audits of Hezbollah-linked bank to be examined by Dubai court

3m Alia Shoaib, Reporter
Shareholders bring lawsuit against Steinhoff and Deloitte

Audit Shareholders bring lawsuit against Steinhoff and Deloitte

4m Alia Shoaib, Reporter
BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

8m Emma Smith, Managing Editor
PwC to take over from Deloitte as Diploma auditor

Accounting Firms PwC to take over from Deloitte as Diploma auditor

9m Alia Shoaib, Reporter