Liquidation buyout saves Godfrey stores
PUBLISHED: 05:00 06 February 2013 | UPDATED: 09:44 06 February 2013
Retail chief Barry Godfrey has vowed to re-employ 15 staff and restock the Godfrey’s DIY businesses in Diss and Stowmarket after buying the stores out of liquidation.
Mr Godfrey used his company Harvey House Retail to purchase the two businesses – and their assets – as going concerns during a creditors meeting with insolvency specialists McTear Williams & Wood on January 30.
The liquidation buyout will now spark a “massive clearance liquidation sale” at the two stores – although question marks still remain over the future of the Norwich store on Riverside Road.
Andrew McTear, insolvency practitioner, said dozens of parties had been interested in acquiring the two businesses, and that they had come to within hours of devaluing the stores because the sale had to be completed before a new property rental period started on February 1.
The announcement comes just weeks after Mr Godfrey had instructed McTear, Williams & Wood to begin the process of winding down the company, which had seen its sales and cashflow dwindling due to the knock-on effect of the housing crisis in 2008, poor weather, and increased competition from other big name DIY retailers.
But despite the Norwich business struggling to remain viable, both the Diss and Stowmarket stores had been operating profitably.
In a statement, Mr Godfrey said: “We are pleased to have been successful in buying the Diss and Stowmarket assets from the liquidator and to be able to re-employ about 15 people.
“We are now working hard to restock the Diss and Stowmarket stores and, to make way for this, we will be running a massive clearance liquidation sale over the next few weeks.”
He added: “The future of the Norwich store remains uncertain.”
Godfrey, which generated a £5m turnover last year, warned in December that it planned to downsize its business, with the possibility of losing up to 20 out of a total of 26 jobs at its Norwich store on Riverside Road, and up to half of the staff at stores in Diss and Stowmarket, where it had employed 14 and 11 people respectively.
Mr McTear said: “We received keen interest from half a dozen parties in the Diss and Stowmarket stores and set a deadline for offers on the day of the liquidation.
“To preserve value in the stores we had to conclude the sale before a new property rental period started on February 1 this year and we achieved this with only eight hours to spare.
“Our job now is to agree creditors’ claims and pay a dividend to creditors. In fact since being appointed we have worked around the clock to pay as much of the 50 employees claims as possible and managed to press the button transferring the funds on day two of the liquidation.
“This is the first time in my career of over 25 years that we have been able to pay employee preferential claims so quickly but from the start we were determined to do everything we could to get some money to the employees as the company’s bank account had been frozen and it was unable to release the January wages.”