Folkstone Fixings (FFX) placed into Administration

[Sideways]

I've just joined this forum & trying to find out, as a supplier to FFX, if I have to write off over £4k of stock supplied to them or if I can get back that which they haven't sold yet!!

Be proactive. Everyone else will be.
Review your contract terms as @AJB Temple says. This is important.
Contact the administrators as @Noel says. State what you are owed and assert your rights over your property if title is still yours.
The administrators are required to follow the hierarchy of claims over the assets of the business. They'll be scambling to get control of it, lock it down and understand the mess that they have on their hands. Staff have to be laid off with urgency, so there isn't a functioning business there any more just the administrators, some key staff kept on for now and a bunch of people possibly working out their notice but totally distracted by the need to find other jobs.

 

[Newbie_Neil]

I've just joined this forum & trying to find out, as a supplier to FFX, if I have to write off over £4k of stock supplied to them or if I can get back that which they haven't sold yet!! As a small manufacturer this is a massive hit to our turnover & cash flow. I will survive but it's going to be more tough years ahead

Hi, I'm sorry to hear your news. If you don't have a 'retention of title' clause on your invoices then you will, probably, get very little from the administration.
You need something like this on your invoices, 'Notwithstanding the other provisions in these Sales Conditions, XXXXX shall retain ownership and title to the Products delivered to the Purchaser by XXXXX until the Purchaser has made full and final payment of all amounts (including interest, costs and penalties) that it owes to XXXXX under all Agreements entered into ...'.
The above should do the job, but I would get a solicitor to confirm the wording that you need.

 

[mg123]

There are other threads on this forum highlighting how we are being ripped off by suppliers.
Sorry but we can't have it both ways. You pays your money and takes your choice.

It's the convenience, you pop to your local hardware store but they don't stock what you need. You ask for an order, and it's either met with "ooooooh it'll cost you", or "it could take a few weeks". There was a small local place to me, 10 minutes walk, who I would visit first for all my hardware and timber needs. They were small so you couldn't get everything, but they had good service and a decent range. But once they went bust, it had to be amazon for a lot of my needs. I'll generally use Screwfix, Toolstation or Wickes now. Big players here, but the options are limited.

 

[Amplidyne]

It's the convenience, you pop to your local hardware store but they don't stock what you need. You ask for an order, and it's either met with "ooooooh it'll cost you", or "it could take a few weeks". There was a small local place to me, 10 minutes walk, who I would visit first for all my hardware and timber needs. They were small so you couldn't get everything, but they had good service and a decent range. But once they went bust, it had to be amazon for a lot of my needs. I'll generally use Screwfix, Toolstation or Wickes now. Big players here, but the options are limited.

50 years ago, as a young chap, I lived in a medium sized Midlands town.
If you wanted anything more specialist than a Phillips screwdriver, at most places you would be greeted, as you say, with a sharp intake of breath, followed by "About a month's delivery" and usually a huge price. We used to go into Brum to get stuff, adn even then the choice was limited.
Now you can go on one of the many internet sites, and basically get pretty well anything delivered "next day"
Sorry and all that, but I'm going to the internet. . .

 

[Phil Pascoe]

We used to buy locally. One place shut for lunch 12pm - 1pm, two 12.30pm - 1.30pm, one 1pm - 2pm. By the time you found what you were looking for (if you were very lucky) you'd have wasted half your working day, although often you wouldn't have - you'd get the standard response, we can get it for you (at an exorbitant price) a week thursday. Along came Screwfix. Very limited forty + years ago but expanding by the month.

 

[Sideways]

For interest. This is from the .gov website summarising the hierarchy of claims on an insolvent business. Cut and paste without edit :

"Distribution of proceeds​

The rights of a creditor who holds a fixed charge on assets (such as a mortgage) to sell the asset to recover their debt are not affected by insolvency. The chargeholder is the first to get paid when the asset is sold. Any surplus will be handed over to the liquidator. When all the assets available to unsecured creditors have been realised, the liquidator will distribute the proceeds in a strict order of priority as follows:

• the fees and charges of the liquidation
• preferential debts, which include wages owed in the four months before the date of the winding-up order and contributions to occupational pension schemes
• any creditor holding a floating charge over an asset, such as a debenture
• all unsecured creditors
• the shareholders

Therefore, unsecured creditors will usually only be paid when the fees and charges of the insolvency procedures and the claims of secured and preferential creditors have been paid. Where a company which is being wound up has assets subject to a floating charge, part of the net proceeds from their sale will, in appropriate cases, be set aside for distribution to the unsecured creditors.

If full repayment of claims is not possible, payments are made in proportion to the value of each claim"

 

[Nick.]

Hi, I'm sorry to hear your news. If you don't have a 'retention of title' clause on your invoices then you will, probably, get very little from the administration.

The other very important aspect is to be able to reference which exact products are held on retention of title by way of serial numbers etc.

When Tewkesbury Saw sadly went into administration there were enough Laguna display machines in the showroom to cover the debt owed but those older display machines had already been paid for and noted by the administrators so we couldn't just turn up and take them.

I was once locked in a building by police along with a few other suppliers about 20 years ago - anyone remember Woodcut down in Worthing? - we turned up (in a surprise to them) due to substantial admin rumours straight after a big weekend show to get our stock back & they called police on us - which in fairness was a legal route for them, despite the fact they planned the admin timing to maximise supplier stock up & cash takings knowing they were screwing people out of goods. I was back in Metabo's HQ office the next week explaining on the phone to customers I had sold to face to face at the show why they wouldn't get their machines delivered and giving them the administrators contact details etc. - that was hard.

 

[AJB Temple]

Just in case no one realises this, you wont get far just looking at the accounts of FFX on companies house website. The actual holding company is Trupanon Topco Ltd and that lost £8.9m in the last filing year to 30/9/23 and £3.2m in the year prior. When you delve a bit, the controlling entity was an offshore hedge fund. The balance sheet of topco (but not the P&L) might look OK to the casual observer who got as far as finding the holding company, but there are somewhat opaque lending arrangements and totally opaque intra group transactions. The balance sheet is propped up pretty much entirely with goodwill. Which is an intangible asset. The snag with goodwill is it can vanish like a puff of smoke in a strong breeze.

Too late now but if I were to be a supplier I would not have provided credit to FFX. I always check the accounts of companies I take any risk with. For me this one had big red flags. Hopefully retail customers will be covered by their credit card operators.

If you don't understand the control structure of a business then you don't know enough to risk any money with them. The administrators might be able to sell the brand name, though negative publicity will have damaged it hugely.

This may be personal prejudice based on my background, but I also take the view with hedge fund controlled businesses, if I've never heard of the auditors then I steer clear.

 

[Sachakins]

Interestingly, this dropped into my email today about.
Know nothing other about what or why yet...

Due to operational issues, Axminster Tools Warrington store is currently closed. We apologise for any inconvenience.

 

[Spectric]

as a supplier to FFX, if I have to write off over £4k of stock supplied to them

Interesting, are you an importer or just a trade wholesale ? If you look at farming where they have had it tough because of the end retailers controling prices aggressively then many have formed small businesses that have cut out the middle man and they sell direct to the public so in your business model could you not have done something similar ?

On a more direct answer to your problem then I would have thought that because they have not paid for those goods then they remain your property so should be returned to you as FFX do not actually own them.

 

[Spectric]

Interestingly, this dropped into my email today about.

Maybe they are reducing actual real estate and looking at the online side which is no good if you want to go a see the goods or get a demo which must help with there sales.

 

[AJB Temple]

I don't know much about Axminster. The last accounts were to end April 2023 and it will be end Jan 25 before anything else emerges. They were loss making by circa £2m being £4m below previous year. Ultimate control is Styles and Brown Limited, which unsurprisingly is also loss making and leaking cash, and at April 23 had about £5m in shareholders equity (consolidated - so including Axi tools ltd obviously). B'S not padded with goodwill (largely amortised), £11m of stock which looks fully covered by creditors and then some. Very little cash. Holding co controlled by the Styles family, and looks as though property assets held in a Styles family pension fund trust which is separate and gets rental income. Hedging losses show cash flows with PRC, Japan, US etc. Quite chunky directors rem'n for a loss making family business.

The accounts are 18 months old now and a lot can change in that time - as Mr Sunak found out. FFX seemed to be shifting a lot more stuff based on their last published accounts and their audit opinion was clean in the prior year. But from a local firm. It's inevitable I suppose that the FFX fallout will make some more risk averse towards Axi (and similar). Clearly they are exiting leases and making some staff redundant which is either a portent of things to come, or we hope swift enough management action to secure the business. Certainly in the current environment I would not be wanting to be stuck with big retail shed lease obligations, associated wage bill and low footfall.

River shop and suchlike will have had an impact. I also wonder if the mature target market is already about saturated with tools and won't replace in these straightened times. Who knows.

If I were axi, and it was truthful, I would be issuing comforting noises right now.

 

[Spectric]

I also wonder if the mature target market is already about saturated with tools

Good point, far too many youngsters can only look at phone screens and are just not hands on so as the older gen move on there is nothing filling the void left behind so no potential buyers starting in so many crafts and skills.

 

[niemeyjt]

I think some of the blame for the closure of high street shops lies with those wonderful people - politicians.

National politicians who oversee business rates that seems to hit retail outlets harder than warehouses.

Local politicians (plus private car park operators) who make driving to the shops now an expensive nightmare with LTNs and their ilk, expensive car parking and draconian enforcement for those who for whatever reason fall foul of the small print.

I admit to mostly shopping either out of town centres or on the internet now - even with places like M&S where there is a local store. It is just less hassle.

 

[Fergie 307]

We used to buy locally. One place shut for lunch 12pm - 1pm, two 12.30pm - 1.30pm, one 1pm - 2pm. By the time you found what you were looking for (if you were very lucky) you'd have wasted half your working day, although often you wouldn't have - you'd get the standard response, we can get it for you (at an exorbitant price) a week thursday. Along came Screwfix. Very limited forty + years ago but expanding by the month.

I took am old enough to remember when Screwfix sold, well, screws, and nothing much else.

 

[MF1000]

For interest. This is from the .gov website summarising the hierarchy of claims on an insolvent business. Cut and paste without edit :

"Distribution of proceeds​

The rights of a creditor who holds a fixed charge on assets (such as a mortgage) to sell the asset to recover their debt are not affected by insolvency. The chargeholder is the first to get paid when the asset is sold. Any surplus will be handed over to the liquidator. When all the assets available to unsecured creditors have been realised, the liquidator will distribute the proceeds in a strict order of priority as follows:

• the fees and charges of the liquidation
• preferential debts, which include wages owed in the four months before the date of the winding-up order and contributions to occupational pension schemes
• any creditor holding a floating charge over an asset, such as a debenture
• all unsecured creditors
• the shareholders

Therefore, unsecured creditors will usually only be paid when the fees and charges of the insolvency procedures and the claims of secured and preferential creditors have been paid. Where a company which is being wound up has assets subject to a floating charge, part of the net proceeds from their sale will, in appropriate cases, be set aside for distribution to the unsecured creditors.

If full repayment of claims is not possible, payments are made in proportion to the value of each claim"

HMRC are the prime creditor and always get their money before anyone else ….i had a two companies I’d done consulting work for go bust in the early 2000’s lost over £2k

 

[Phil Pascoe]

I took am old enough to remember when Screwfix sold, well, screws, and nothing much else.

Likewise.

 

[Spectric]

I think some of the blame for the closure of high street shops lies with those wonderful people - politicians.

National politicians who oversee business rates that seems to hit retail outlets harder than warehouses.

That is part of it but also think of the rents that the property companies are charging retailers, it is all part of a circle that needs to be broken to give highstreet retail a fair playing field.

 

[Delaney]

Were those figures before they closed Nuneton and reduced the High Wycombe store by a third ? they're certainly working at cost cutting.

They closed Basingstoke too.

A lot of these companies don’t realise that you need too buy your own property to avoid ups and downs and to weather storms.
Axminster closed their locations becuase the rent after review went up by 3x.
One of the best thing you can do is own your own premises.
Unfortunately the conservative government and now labour, are throttling industrial and commercial which is putting up rates ridiculously. Another burden on British business.

 

[MF1000]

Rent reviews are built into commercial leases and increases are paid to the leaseholder. Business rates are a separate issue and paid to the local authority, the ratings are set and appeals against the rateable value are administered by a government department