At the end of last month, England and Wales have consistently reported the second-highest number of company insolvencies since 2009. This trend is driven by the high-interest rates and rising costs resulting from the rapid inflation of 2022 and 2023.

The elevated total is partly due to the increase in the overall number of businesses. However, the percentage of companies entering insolvency earlier this year remains slightly higher and is still significantly lower than the rates seen in the aftermath of the 2008-09 global financial crisis. 

Below are some notable businesses that have entered insolvency in the last few days:

CTD Tiles Shuts 56 Stores and Enters Administration

Topps Tiles has acquired the CTD Tiles brands and certain assets for £9 million following CTD Tiles’ entry into administration. The purchase, made from administrators James Lumb and Will Wright of Interpath, includes the CTD brands—CTD Tiles, CTD Trade, and CTD Architectural Tiles—along with 30 retail stores, selected stock, and all related intellectual property from CTD Tiles Limited.

Previously owned by Aurelius Investments since 2022, CTD Tiles operated 86 stores across the UK. Topps Tiles will not acquire 56 of these stores, which will be disposed of through the administration process. Despite being named the fastest-growing online tile brand in the UK at the start of the year, CTD Tiles’ revenue has reportedly dropped by about 30%, from £113 million in 2023. 

CTD Tiles had recently filed a notice of intent to appoint administrators, and Interpath Advisory was brought in to manage the company’s sale, aiming for a pre-pack administration deal. Before going into administration, CTD Tiles served the retail, trade, and commercial markets, with its brands generating a total annual revenue of £75 million. The commercial segment contributed £16 million from volume housebuilders and £8 million from the A&D sector.

Topps Tiles, a subsidiary of Topps Group, sees this acquisition as a strategic move to enter the housebuilder sector and expand its presence in the A&D market. The CTD brand is viewed as complementary to Topps Tiles’ existing business model, and the newly acquired stores will continue to operate under the CTD name.

Topps Group CEO Rob Parker believes CTD Tiles fits well with his company’s strategy. He noted that the acquisition of 30 high-quality stores, along with supporting infrastructure and customer data, aligns with Topps Tiles’ goals and will help achieve their Mission 365 sales target. He expressed enthusiasm for integrating CTD into the Topps Group and welcoming new team members.

Avon Falls for Bankruptcy After Powder Brand Faces Allegations

Avon Products Inc. (API), a subsidiary of the Brazilian beauty conglomerate Natura that oversees the UK, Europe, and Latin America businesses, has filed for Chapter 11 bankruptcy protection.This move is aimed at mitigating the impact of impending lawsuits and mounting debt pressures.

API has stated that this filing will allow the company to manage its debt obligations in a structured manner. Natura has proposed purchasing Avon’s non-U.S. trading operations for $125 million (£97 million) following the completion of the bankruptcy process.

This development comes amidst a wave of legal actions against various cosmetic brands, with Avon facing 100 claims linking its talc-containing products, such as eye shadows and face powders, to cancer. Avon has denied these allegations, asserting that it has only used “cosmetic grade talc” in its products, which has been tested to confirm it does not contain asbestos.

API has already spent $225 million defending itself against personal injury lawsuits and settlement payments, and the company has acknowledged that it lacks “sufficient liquidity” to manage the 386 individual talc-related cases. The company’s total debts amount to $1.3 billion, with liabilities related to talc claims valued at $78 million.

Despite its long-standing “Ding dong! Avon Calling” slogan, which was retired in the 1960s, Avon has operated primarily through a door-to-door sales model. However, late last year, the company announced plans to open physical stores in the UK, where sales representatives would manage “mini beauty boutiques” as franchisees. Avon’s UK operations will continue to trade, and no job cuts are anticipated.

Kristof Neirynck, Avon’s CEO, emphasised the company’s commitment to advancing its international business strategy, modernising its direct selling model, and rejuvenating the brand to drive growth. Natura has pledged up to $43 million in support of the bankruptcy process and has submitted a $125 million bid to reacquire the trading operations in Europe, Asia, and Latin America. If successful, Natura will take control in these regions.

Pre-pack Assets Sold by Modpods International 

A Coventry modular housebuilder, Modpods International, has entered administration due to rising costs and relocation issues. On August 12, Paul Ellison and Christopher Errington from KRE Corporate Recovery were appointed as joint administrators.

Prior to the administration, attempts were made to sell the business and its assets as a going concern, but no buyers emerged. As a result, all 122 employees were made redundant on July 11, 2024.

The administrators have since completed a pre-pack sale of Modpods’ assets to HPG Developments. Modpods, which specialised in designing and constructing modular buildings, faced insolvency largely due to the expensive and prolonged relocation of its trading premises. Additional challenges included a client dispute and difficult trading conditions, which severely affected the company’s cash flow.

H Parkinson Haulage Falls into Administration

H Parkinson Haulage, a long-established, family-run logistics company in Lancashire, has entered administration. Based in Preston, the company offered a range of services including transport, warehousing, and vehicle maintenance. The insolvency news comes despite recent revenue growth and a return to pre-tax profits

Founded in the early 1950s, H Parkinson Haulage operated from five locations in the North West and one in Wales. However, on August 5, the company appointed insolvency specialists from FRP Advisory as administrators. Additionally, vehicle operator licensing records indicate that the company’s standard national licence for 85 HGVs and 160 trailers is currently under review by the traffic commissioner for potential surrender.

The administration comes as a surprise given the company’s improved financial performance in the year ending June 30, 2023. H Parkinson Haulage reported revenues of £16.3 million, up from £15 million in 2022, and achieved a pre-tax profit of £69,000, reversing a £35,000 loss from the previous year.

In its 2023 accounts, H Parkinson Haulage’s fixed assets were valued at £4.3 million, with current assets slightly exceeding £4 million. Despite these assets, the company owed more than £7 million to creditors, with total equity amounting to just over £1 million.

The company noted that it increased its rates to counter rising costs and maintain its contracts amidst growing challenges in the industry. However, it acknowledged the ongoing difficulties, citing fierce competition in the haulage sector, supply chain disruptions, driver shortages, and inflation as significant pressures.

Carpenter Oak Build acquires Xylotek Limited

Xylotek Limited, a Bristol-based timber construction specialist, entered administration at the end of July, with Simon Jagger and Ben Woodthorpe of ReSolve Advisory appointed as joint administrators. According to the company’s financial statements for the year ending December 31, 2022, Xylotek’s fixed assets were valued at just over £100,000, while its current assets totaled nearly £1.4 million. However, the company also had net liabilities exceeding £41,000. 

Despite these challenges, Carpenter Oak Build, a Devon timber company, has acquired the business. Carpenter Oak Build was originally co-founded by Charley Brentnall, who also co-founded Xylotek in 2018 alongside Oscar Emanuel and Martin Self, to merge their diverse expertise and passion for timber in architecture.

Brentnall, who passed away earlier this year, had also been instrumental in establishing Carpenter Oak Build, known for designing and constructing timber-framed buildings since 1987. Xylotek had earned international recognition and success for its innovative timber projects. However, the company recently faced difficulties, citing “rapid growth” that led to working capital challenges and subsequently impacted its performance.

The acquisition by Carpenter Oak Build was facilitated with the guidance of ReSolve business advisors. Luke Copley-Wilkins, Managing Director at Carpenter Oak Build, emphasised that Xylotek offered a unique service, filling a crucial gap in the UK construction market. He highlighted the growing demand among architects, engineers, and clients for wood as a sustainable building material, both for its environmental benefits and aesthetic appeal.

The acquisition merges Carpenter Oak’s 30 years of expertise in traditional timber construction with Xylotek’s proficiency in modern engineered timber structures, positioning the combined entity to capitalise on the industry’s shift towards sustainable building materials and practices, with timber at the forefront due to its low-carbon and renewable attributes.

To stay up to date with the latest businesses entering insolvency across the UK market, visit Administration List today.