INDUSTRYNEWS
Pre-pack administration:
Time to draw a line in the sand
Following yet another controversial glazing
industry pre-pack administration, Gary Morton
of the Boing Boing Group gives his take on the
practise, and how the industry should respond.
» ONCE, THERE WAS A REAL
stigma attached to going bankrupt – and as a
society, it’s good we’ve become a little more
compassionate.
Sometimes, businesses fail through no direct
fault of the people that own and run them, and
those people deserve our understanding and
support, if appropriate.
But it is also feasible for companies to take
advantage of our collective generosity and
goodwill.
This, unfortunately, is what we have seen
with the recent collapse of the Customade
Group.
In June, the company was placed into
administration, owing huge sums of money to
its suppliers, crown debt and worst of all, a fair
number of its employees.
‘as a sector, we’ve got
the power to make
this type of pre-pack
socially unacceptabe’
However, within minutes it had been bought
by Dutch private equity firm Nimbus, as part of
a ‘pre-pack administration’, and resurrected as
a new company – unbelievably, headed by the
exact same management team.
Incidentally, the new companies were set up
in early February, way before Covid-19 struck.
In certain situations, pre-packs are a good
thing – they can rescue struggling businesses
in a way that saves jobs; helping the suppliers,
employees, and customers.
In practise they are often used for
all the wrong reasons. When executive
mismanagement takes thriving, well-regarded
businesses and destroys them, they can let
the people responsible walk away without any
repercussions – and leave suppliers and former
employees to pick up the pieces.
NO CONSEQUENCES,
NO RESPONSIBILITY
More or less, three hundred people lost their
jobs as part of the Customade ‘pre-pack’ deal –
most of them by text message. Hannah Bardell,
MP for Livingston, where a lot of those jobs
have been cut, said she was ‘disgusted’. She’s not
the only one. But the thing I find most appalling
of all is that the company’s management have
not taken a shred of responsibility for what has
happened. The arrogance of it is breath-taking.
The industry rumour mill is awash with tales
of strong-arm tactics to enforce continued
supply, customers forced to pay the debts
of Oldco, and Newco not standing by their
product warranties.
When you run a business, you get highly paid,
but the buck stops with you. Be humble, admit
errors, adapt your attitude to fit the occasion,
but no… not these guys.
It seems they aren’t willing to accept any
responsibility whatsoever, blaming IT viruses,
Covid-19, bad debts and more.
During pre-packs, administrators are
required to submit a report on the conduct of
a company’s directors. Let’s just say I think this
one would make for very interesting.
TIME TO DRAW A LINE
IN THE SAND
It isn’t the first time pre-packs have allowed
devious management and directors to cause
huge damage to our industry, and leave the
businesses who depended on them struggling
to make ends meet.
But as a sector, we’ve got the power
to make this type of pre-pack socially
unacceptable.
For the sake of our industry and all the
great people in it, I think we have a moral
responsibility to stand up to companies like
these – to tell them that if you treat your
suppliers, your customers and your employees
with such disdain, we won’t work with you.
When incidents like these have happened in
the past, I’m sorry to say, many of us have been
shown to have very short memories. We’ll get
angry about it for a bit, but soon slip back into
the familiar routine, and start giving them our
money again.
This time, we have to do better than that.
It’s extremely encouraging to see some of the
industry’s most respected suppliers and the
media refusing to deal with Customade’s latest
incarnation - Glass Times, the FIT Show, VBH
and Veka to name a few.
Hats off to them for taking this stance. My
hope is that many other businesses will follow
suit.
DOING THE RIGHT THING
Doing the right thing is rarely easy. Especially
in times as uncertain as these, we’re all under
pressure to take every bit of business that
comes our way.
But if we just roll over and let those
responsible get away with it, we will only
have ourselves to blame when the same thing
happens again, as it inevitably will.
www.centralrpl.co.uk
10 » SEP 2020 » CLEARVIEW-UK.COM