Corporate recovery specialists at Begbies Traynor have helped one of the country’s best loved independent bookstores to survive.
Bob Young and Steve Currie, partners at corporate recovery specialists Begbies Traynor, arranged a Company Voluntary Arrangement (CVA), ensuring that Motor Books (UK) Ltd could continue to trade.
Motor Books is the oldest motoring bookseller in the world. It was established in 1950 and over the years has expanded its operations to cover railway, aviation, maritime and military subjects.
It is located in Cecil Court, London, where it moved shortly after the business had celebrated its 50th anniversary.
Bob Young said: “Motor Books was highly popular with its customers but a number of decisions and issues in recent years had contributed to the business falling into an insolvent situation.
“Expanding into stores in Bournemouth, Swindon and Oxford had not proven successful over the years – the business was left with a bad debt of £17,000 on the Oxford premises - but in 2010 the company suffered a further serious blow when its principal supplier of motoring titles, Menoshire Ltd, suddenly ceased trading.
“Motor Books had a long trading history with Menoshire and preferential trading terms. It was not able to fill this gap quickly and on the same commercial terms with multiple book wholesalers and consequently turnover slumped from £798,235 in 2009 to £644,942 in 2010.”
The owner of the business, Thomas Gethings, has worked with Bob Young and Steve Currie on a proposal to save the business. Mr Gethings is personally owed a total of £159,451.55 which he injected into the company in order to enable it to continue trading.
Under the CVA, the proposals provide for all creditors to be paid in full over a five year period.
Mr Young said: “By focusing on one location in an excellent area for bookstores, and by building up online sales, it is considered that the business has a sound future.
“That is why we worked with Mr Gethings towards establishing a CVA as the best way forward both for the business and for the creditors, who would have received considerably less if the business had gone into liquidation.
“We are pleased we have been able to save such a well known and much loved British institution, and this is another example of how a business can be saved.
“A CVA is a useful tool and can help to save a business and jobs while establishing sensible and sustainable arrangements for the payment of creditors.”
Bob Young is senior partner at Begbies Traynor in Stoke-on-Trent, a fellow of the Insolvency Practitioners Association (FIPA) and a member of the Association of Business Recovery Professionals (MABRP) - and has over 30 years' experience of corporate rescue and recovery, turnaround and corporate and personal insolvency work. Formerly a partner in Poppleton & Appleby, a director of PricewaterhouseCoopers and Official Receiver in Birmingham, Bob has built up a substantial following in Staffordshire and beyond, and he chairs the North Staffordshire Chamber of Commerce Business & Finance Committee.