Boutique Fusions: The story of the collapse of bold new vision for shopping in Norwich
12:30 07 August 2014
A Norwich department store has vowed to pay its debts after its shock closure left businesses and staff thousands of pounds out of pocket.
Boutique Fusions – based in the old Hovells shop on Bedford Street – was forced to shut down in June when its landlord called in the bailiffs and changed the locks following months of missed rental payments.
The move comes after the company became caught in a debt spiral soon after opening which prevented 18 staff being paid and dozens of concession holders from receiving sales money.
Records reveal that Boutique Fusions and its owners now face county court judgements worth £12,493 – although it is understood that the firm may owe businesses much more.
But the company has pledged to pay its dues and restore its reputation, even if it means starting up another business.
“We are planning how to move forward, but we need to get to grips with everything,” said Thomas Tembo, co-owner of Boutique Fusions. “Whatever we do we are not going to make the same mistakes again. We want to get something going quickly because we need to generate some funds.”
Kindi Tembo, co-owner of the company, added: “We are determined to clear our name because we didn’t go into this in order for it to turn out like it has.
“We would like to pay everyone back,” she added. “That is what we are trying to work towards.”
Boutique Fusions opened on March 20 this year, hosting 32 independent retailers selling clothes, flowers, children’s toys, chocolates, homeware, skin care and soft furnishings.
The store that sits on the corner of Bedford Street and Bridewell Alley is remembered affectionately by shoppers for its links to the furniture company Hovells.
The business – which traded for more than 150 years – spent decades at the city-centre site and was best known for its vast array of baskets that could be found stacked both in and outside the shop.
In 1969 the Butcher Group bought Hovells and eventually closed the Bridewell Alley store to move the business to Barker Street. It opened a shop in Lowestoft and developed its online business before cost pressures forced the firm to close in 2012.
Since then, the former directors of Hovells, Jonathan and James Butcher, have moved into the world of creative technology by investing a six-figure sum into creating the PagePooch app – a programme for smartphones that alerts internet shoppers when prices have dropped on products they want to buy.
Meanwhile, the Butcher Group Pension Fund continues to own residential and commercial property across the city, including a number of premises on Bedford Street.
It planned to make money by asking each retail concession to pay a quarterly fee to cover business rates, rent, utilities and office space. In return, each retailer would keep the money made from their sales.
But the company began to run into trouble when it failed to bring in enough quarterly fees to pay staff.
“We had a couple of businesses that signed late that were due to pay us in March – we thought that would cover the wages for that month,” Mrs Tembo said.
“However those businesses would not pay us the money until we provided the sales reports.”
New vision for store
The landlord of the former Hovell’s shop has revealed plans to transform the building into a retail hub.
The Butcher Group Pension Fund is looking to “invest heavily” into 25/27, Bedford Street, to turn it into a space for six new businesses.
Guy Gowing, managing partner at Arnold Keys, the agent for the premises, said the new vision would provide space for three shops and studios for artists.
He added: “25/27, Bedford Street, is a nice big retail premises and because it is on a lot of different levels it is difficult to run as one big shop.
“That is why we have decided to break it up into six different businesses.
“The landlord looks after other premises on that street so they want to keep the area vibrant because it helps the other traders.
“We are looking for well thought through businesses, and we would love to have interesting retailers that have great ideas to make it work and breath fresh life into the building.
Boutique Fusions said that it was unable to provide the reports on time because it could not understand some of the stock lists provided by the concession holders.
“We didn’t have the cash flow to pay for the full wages, but we did manage from our own money to cover the April wages,” Mrs Tembo added
“Then we fell into the situation where the staff needed the next lot of wages and we had no way of paying them because we needed the money ourselves.
“The biggest mistake we made was that we used the sales money to pay the staff wages. Our thinking was that the businesses wouldn’t mind waiting a little while in order to get the staff paid.”
The company was dealt a crippling blow weeks before it closed when 12 concessions walked out on the same day in protest over missing sales money.
It is understood that the landlord – the Butcher Group Pension Fund – tried to support Boutique Fusions with its rent arrears, offering to change the terms of the agreement to help with payments. But it eventually lost confidence in the department store when it failed to pay over consecutive months.
Mr Tembo said the company had been hit by a number of “unaccounted costs” caused by the age of building which it had paid to repair.
But he believes the business could have brought in more retailers and kept trading if the landlord had given it more time.
A retailer that took a concession at Boutique Fusions is now going it alone and launching a new store in Norwich’s Royal Arcade.
Lisa Morgan, of women’s fashion firm Aluna J, is opening her new shop opposite the Jamie Oliver Restaurant selling ladies clothes, handbags and scarves.
The entrepreneur is looking to bounce back after she pulled out of the Bedford Street department store when she was not paid the sales money she was owed.
Mrs Morgan, who is a trained chartered accountant, said the concept for Boutique Fusions was a nice idea, but needed more capital investment to get it off the ground and running.
“I was trying to support them and I understood that all businesses had teething problems,” she said. “It is disappointing that we are owed money and we have not seen a penny from what we have sold, but we have made some good contacts with the concession holders that were there.”
She has now been trying to sell her spring and summer collections online, or from home, because she can no longer display them at Boutique Fusions.
A shop assistant that left Boutique Fusions without being paid has described how mounting unpaid bills forced her out of her home.
Amelia Wilkinson, 25, of Norwich, had high hopes of forging a career at the department store driven by a long-held passion to work in retail.
But she became concerned that her dream was not going to plan when she was no longer being paid – despite working for months on end.
Eventually Miss Wilkinson was thrust into such financial hardship that she had to move out of her home because she could not longer meet the rental payments.
She said: “I am losing my rented home because I have bills that I have not paid and my landlord thinks I am untrustworthy.
“I’m now trying to find better accommodation elsewhere.
“I am very passionate about retail and thought that I could stay at Boutique Fusions for a few years.
I was ready to give my all and put a lot of effort in.”
“But I also feel sorry for the small businesses,” she added. “These are local people trying to sell really unique products in Norwich.”