Family-run Leicester independent retailer The Gas Superstore has been placed into administration.
The store, which was founded by Raymond Fenn in 1969, had expanded greatly over the years to achieve an annual turnover of around £12 million. It ceased trading and closed its website on April 2, while it consulted business advisors on how to save the business.
Towards the end of May, administrators Nathan Jones and John Lowe at FRP Advisory were brought in and are now seeking a buyer for the business and its assets.
In a statement, FRP Advisory said: “The joint administrators are marketing the business and the assets of the company for sale and request interested parties to make early contact.
“Prior to the suspension of trading, Gas Superstore had sought to recapitalise the business, however the necessary injection of capital failed to materialise, resulting in pressure on cash flow increasing to unsustainable levels.
“The company was left with no viable option other than to first suspend trading and then seek the protection of administration to allow for a more viable long-term solution to be found.”
In an exclusive interview with ERT, former managing director Paul Fenn said: “The family [Paul, brother Mark and father Raymond] and all our staff are devastated.”
Mr Fenn pointed to a number of factors that led to the move. He told ERT that the company had “never really recovered from its costly move into a new distribution centre”, and had been hit with a £27,000 bill for damage after a gang of teenagers broke into the old warehouse they had just vacated and trashed it.
“Then the company website was hacked and, as a result of that, customers were told we did not deliver to their postcode – when we would have. This had huge implications for cash flow,” he told ERT.
Mr Fenn added that things went from bad to worse when, in an attempt to recover from the loss of trade after the hacking incident, they dropped their prices and found that many suppliers they had built up a good relationship with over the years then would no longer supply them.
If that was not enough, he added, a credit card company imposed a 20p in the £1 levy to help build up a pot of money for ‘security’.
To cap it all, Mr Fenn added, they were hit by a “clever fraud” at the tail end of last year, which cost them £30,000 and a valued member of staff.
“We put money back into the business from our pensions, plus family money, but it was not enough,” Mr Fenn told ERT.
He added, however, that the company did try to look after its suppliers and that it made sure it paid all its debts to buying group CIH.
In the end, Mr Fenn said he could see “no way out” and called in the administrators.