The Company was originally incorporated in 2003 having a previous company name. The Company was dormant for just over two years, when following a name change the Company commenced trading as a mobile pet business, in Surrey.
The concept had been originated by the Director’s wife, who was looking to channel her love of animals into a business opportunity and having gained local support and an increasing client base, when the opportunity arose to acquire a pet shop which had been operating for some 17 years, the Director and his wife decided to negotiate its purchase.
The consideration of £25,000, to include the goodwill and the stock, was raised by a loan from the Director’s father.
The premises were located in Dorking. The lease, which had three years unexpired and attracted an annual rental of £12,500, was held the couple personally. The Company was in occupation on an informal basis.
In 2008, the Director decided to integrate his other business, which handled kitchen installation, into the Company so he would be more on hand on a day-to-day basis. The Company continued to operate the two bank accounts previously particular to each business, with the pet shop maintaining an account with one bank and the consultancy with another bank.
By early 2009, the declining economy had adversely affected the kitchen installation business and during that year it ceased to operate. Thereafter, the Director took on a consultancy role within that industry to generate income.
During this period, the pet shop had continued to trade moderately successfully, increasing sales year on year. During the year ending 31 March 2012 a turnover of approximately £220,000 was achieved with a profit of just over £35,000.
However, in 2012, a large branch of a well-known retailer opened selling many pet products at discounted prices, creating a significant drop in sales. The resultant cash flow difficulties were compounded by the loss of income from the Director’s consultancy as his contract finished and was not renewed.
In early 2013, the local supermarket, which was key to footfall in the town as a whole, closed for a two-year refurbishment programme.
With sales having fallen by 40% and their reserves eroded, the company began to fall behind with payments to creditors.
Having learnt that another long-established equine business in Dorking was planning to open a retail pet outlet and in the belief that this would further impact on sales, advice was sought and having concluded that ongoing trading was untenable, the shop closed owing almost £20,000 to trade and expense creditors and just over £50,000 to HM Revenue and Customs.
Thereafter, AABRS were instructed to convene a meeting of creditors and place the Company into Liquidation.
The Liquidator had the stock professionally valued and the Director personally purchased the stock for £2,500.
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