Mon, 18 Mar 2024 | BUSINESS SALE
A Blackburn-based custom clothing company that fell into administration after struggling in the aftermath of the COVID-19 pandemic has been acquired in a rescue deal. Inkthreadable Limited was founded by Alexander and Aaron Cunliffe and Amy Dunn in 2011, when the three were still teenagers.
Despite initially being hit by COVID-19 and its associated lockdowns, the company subsequently experienced a surge in orders during the pandemic, leading it to undertake significant expansion. However, sales failed to remain at these levels, and the company began to suffer from cashflow issues that were exacerbated by tough trading conditions over the past year and significant debts and tax liabilities.
The company, which was based at Blackburn Business Park after moving from its original Oswaldtwistle Mills premises during the pandemic, engaged Leonard Curtis Business Recovery on a “time to pay” agreement with HMRC as it sought to address its immediate financial issues.
However, in January, it was decided that the company was effectively insolvent and that a rescue deal should be sought. According to administrators, the company owed two mortgages to Arkle Limited in relation to its plant and machinery, as well as owing approximately £1.25 million to trade and expense creditors and had also received a government-backed “Bounce Back” loan totalling £28,842 during the pandemic.
Commenting on the company’s struggles, administrator Megan Singleton of Leonard Curtis said: "The directors advised that the company initially suffered financially following the COVID-19 pandemic and subsequent lockdowns.”
"During the pandemic, the company received a surge in orders. As a result of this, the directors made a decision to move into larger trading premises and employ further members of staff to meet this demand.”
"The directors have advised that following the easing of lockdown measures, the level of demand for the company's products reduced to pre-pandemic levels. This resulted in the company servicing larger-than-required premises and having employed more staff than required.”
"As such the company did not have sufficient cashflow to keep up with its overheads and other creditors."
Administrators have now secured a sale of the business to Hyper Merch Limited, of which Inkthreadable co-founder Alexander Cunliffe is a director, in a deal that will see the transfer of 20 jobs and other company assets, including plant and machinery and goodwill, for a total of £130,000.
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