Just a year after popular bagel franchise Bross Bagels entered administration, owner Larah Bross’s second business, Hot Mama Bagels has filed for insolvency. The “Bagel Queen’s” company has collapsed and entered liquidation. Hot Mama Bagels Ltd filed for insolvency on August 5, less than a year after Bross Bagels Ltd went under with nearly £1 million in debt. The former Bross Bagels locations in Portobello, Stockbridge, and Brunstfield had been rebranded under Hot Mama Bagels after Bross’s new company purchased the distressed chain’s assets for £18,000.

All locations have since closed, and the company’s catering equipment, furniture, and other assets are now up for auction through asset recovery specialist Sweeney Kincaid. Anderson Anderson Brown (ABB) has been appointed as the official liquidators for Hot Mama Bagels Ltd. The scale of the debt and the number of creditors are still unknown.

Despite stepping away from Hot Mama Bagels due to a significant toll on her mental health, Bross has already launched a new venture. She is now listed as a director and majority shareholder of World Wide Hole Limited. This is alongside chef and food industry consultant Jeff Kipp and Declan Penfold, a consultant working with global businesses and influencers.

The official liquidators of Bross Bagels Ltd, Interpath Advisory, have yet to submit their findings. Bross Bagels Ltd’s collapse left debts of approximately £635,000 to HM Revenue & Customs, including unpaid taxes, National Insurance, VAT, and student loan deductions from staff wages. Unsecured creditors and small suppliers are estimated to be owed around £280,000, while crowdfunders who contributed £150,000 will receive nothing.

Bross, who participated in Foodies Festivals and appeared with celebrities like Peter Andre and Gemma Collins over the summer, updated crowdfunders on July 25. She acknowledged the difficulties faced and emphasised that prioritising her well-being was necessary. While she couldn’t guarantee a return on investment from Bross Bagels, she said she remains committed to finding ways to make it right in the future.  

A spokesperson for ABB confirmed the appointment of Judith Howson and David McGinness as Joint Interim Liquidators of Hot Mama Bagels Ltd on August 5, 2024. The Insolvency Service is already investigating the situation, particularly because of outstanding fiscal issues.

Key Takeaways

The repeated collapse of Larah Bross’s business ventures highlights several key aspects of the insolvency process. This is a classic example of phoenix companies – businesses that often struggle to get restructured when the original owners are involved, as they tend to replicate previous mistakes and accrue more debt. In this case, the fundamental issues related to the business may not have been solved, leading to its failure.

Successful businesses often require resilient and adaptable models that can withstand economic pressures and market changes. A business model that contributed to the failure of previous ventures should be reassessed and modified. Repeated failures can undermine investor and creditor confidence. Those who invested in the original business and its phoenix successor may be wary of future investments in similar ventures, impacting the owner’s ability to secure funding.

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