Administrators called in at The Licence Factory

STOCKPORT-based branded goods importer The Licence Factory has called in administrators.

The company, which produced ranges of watches, bags and accessories, has ceased trading after its main funder GE Commercial Finance appointed RSM Tenon as administrators, although shares in its parent firm Marlwood had been suspended by the Cayman Islands Stock Exchange since April.

A statement issued by Marlwood yesterday said that it ” will continue to explore the options available to it with respect to the ongoing business. However, it is clear that this appointment will present significant challenges to the group.”

“We intend to issue a trading update shortly to provide shareholders with further information about the financial position of the group,” it said.

Marlwood floated on the Cayman Islands Stock Exchange in November 2009 in a deal which valued its two subsidiaries – The Licence Factory and stock clearance firm Brennan Atkinson International – at £6.3m.

The deal raised an initial £1.2m in cash to allow the firms to develop a portfolio of licensed brands, but it has reported heavy losses since and it sold off the stock clearance business back to founder Martin Abramson last year in a £2.5m deal.

Despite making a £1.5m profit on the sale, the company still managed a pre-tax loss of £1.4m on sales of just over £3m in 2010.

The company had also raised a further £1.5m in December last year and £800,000 in March. Almost £500,000 of this was generated in a bid to improve stock and working capital levels, but the rest was earmarked for developing a portfolio of branded products.

The firm said that it was in talks with brands such as Kangol, Fila and Lipsy about producing branded ranges.

Marlwood said yesterday that it would “provide a further update on the administration of The Licence Factory Limited as matters become clearer”.

The Licence Factory is based on the Newby Road Industrial Estate in Hazel Grove.