Published on 9 - March - 2011
EXCLUSIVE: Sarum Wholesale in administrationSarum Wholesale has confirmed to DIY Week that it has gone into administration, after trading at a loss for several months.
The business closed its doors on Tuesday, March 1, and has made all 23 members of staff redundant.
Speaking to DIY Week, head of buying Jon Mouland explained that the company simply couldn't get enough stock to generate the cash needed to pay the overheads.
He said: "Suppliers' credit limits have been restricted, and our customers haven't been paying us very quickly. We've found the last six months very difficult and we have been trading at a loss, so we decided to shut the doors straight away on March 1, make everybody redundant and sell off all the stock. If we'd left it another six months there might not have been anything left."
Mr Mouland said the decision to close was made very quickly, to take advantage of the low amount currently owed to creditors.
"Our creditors are very low," he explained. "We don't owe the bank much. I just couldn't see us getting enough stock back in to generate enough cash to get out of it. It had to be done immediately. It was quite a quick decision. 23 staff members came in on March 1 and by 9 o'clock they were made redundant. A few of them have been with me for 27 years."
The business took the decision to cease trading before the start of the gardening season, normally the busiest time of year for the trade.
Mr Mouland said: "The bulk of our business is February to May. In those four months of the gardening season we can do an awful lot of business, but we were very low on the ground with stock. To fill up now for the garden season, if my customers have a bad time, and don't pay me, I'm stuck in the middle with debt around my neck. I wasn't willing to take that risk. It was a hard decision to take but I hope it's the right one."
He added: "We used to have a surplus of funds and we haven't anymore, it's all gone into the business. 25% of our customers are brilliant at paying, but others not paying has been a problem. And suppliers are a bit cautious at the moment."
Sarum has appointed Philip Gorman of Hazlewoods LLP in Gloucester as administrator. All stock and property is to be sold, with creditors expected to be paid in full. The company has also employed a debt collecting agency to round up any money currently owed.
Mr Mouland is now focused on selling the stock and paying creditors, and the phone lines at Sarum's office in Salisbury are still up and running.
He is unsure of future plans, but is confident that the right decision has been made. "It was the right time to do it. I can sleep at night now."
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