Experience

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The company traded from high street premises and the lease attracted an annual rental of £12,500.

The pet shop had continued to trade moderately successfully, increasing sales year on year. During the last year a turnover of approximately £220,000 was achieved with a profit of just over £35,000.

However, a large branch of a well-known retailer opened on the high street selling many pet products at discounted prices and creating a significant drop in sales.

In addition, the local supermarket, which was a key to footfall in Dorking 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. The advice provided by AABRS was to place the company into liquidation.

Should you have any further queries in relation to this case study, please contact Alan Simon on 020 8444 2000 or emailas@aabrs.com.

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