Loss-making Carcraft ran out of road
CARCRAFT, the Rochdale-based chain of used car supermarkets, has ceased trading with more than 500 job losses.
The business, sold by its founders the McKee family to a management team in April 2014, had 10 sites nationwide. Business advisory firm Grant Thornton is handling the administration.
In the year to March 31 2014 the group, which was backed by investment firm Apollo Ventures, made a loss of £14.6m on revenue of £179.7m.
A former supplier to the company said: “Everyone is shocked. Liverpool had always been the poorest performing site and when it was closed last month we presumed it was part of reorganisation under a new chief executive.
“All staff were told the bad news the business was closing on Thursday morning and were stunned.”
In a statement Grant Thornton said partners Daniel Smith and Joe McLean, had been appointed as administrators after a sales process, launched in February, failed.
Daniel Smith said: “With great regret a conclusion was reached that it is no longer viable to keep Carcraft in operation. In order to prevent further losses it has been agreed with management and creditors to cease operations with immediate effect.
“Carcraft will retain a skeleton staff to assist with the realisation of assets. In the event there are any approaches from interested parties post appointment we will react to these accordingly.”
The group’s finance arm, All In One Finance, which is regulated by the Financial Conduct Authority (FCA), is expected to be placed into administration shortly, once FCA clearance has been obtained, Grant Thornton said.
Administrators said the business had encountered a host of difficulties: “The group operates in a competitive market and has suffered from poor market reputation, lack of investment, a high cost base, expensive loan note financing and an insolvent balance sheet all of which have hindered investment. The group also has legacy PPI claims.”
Staff were paid up to April 30, Grant Thornton added.
Consumers who had bought Carcraft’s Drive Happy Plan – a product which covered a warranty, MOT, servicing and roadside assistance – will no longer be covered, the administrator said.
Customers who have paid a deposit for a car can contact the administrators via carcraft@uk.gt.com . A helpline has been set up for customers 0800 923 9495.
Rochdale Borough Council leader Richard Farnell said: “This is terrible news for the Carcraft employees in Rochdale.
“The council is talking to the appointed administrator to see if there is any support we can provide, particularly in trying to find a new owner for what has been an important business for our borough, and what their approach is going to be towards the affected staff.
“We will also make sure that people are given the right information and directed towards the right services during what will be a very difficult time.”
