Family retailer runs out of cash and luck; Founded with a single retail barrow in the Gateshead MetroCentre, Collectables grew for 27 years, surviving recessions.
November 18, 2013 Leave a comment
November 14, 2013 7:29 pm
Family retailer runs out of cash and luck
By Chris Tighe
The run-up to Christmas should have been a prime time for Collectables to sell its ranges of gifts, cookware, handbags and jewellery. Instead the northeast retail chain’s 14 units are closed, its 200 employees redundant and the business in administration. Founded with a single retail barrow in the Gateshead MetroCentre, Collectables grew for 27 years, surviving recessions. But the retailer’s luck ran out in late September when it could not raise the money needed to gear up for Christmas. Its failure highlights concern that some fragile companies could finally succumb just as the economy starts to recover.“Sustained difficult trading conditions have resulted in the business facing cash pressures with a further increased demand for working capital in preparation for the Christmas trading period,” said Jonny Marston of KPMG, the professional services firm, when he was called in as joint administrator.
Collectables was founded by Philip Lewis, a life-long entrepreneur, who had previously built chains of newsagents and off-licences in the north of England. The miners’ strike of 1984-5 killed his business by eroding local spending power, leaving him jobless with just £100 in his pocket.
Undeterred, he started again with a stall at the newly opened MetroCentre in 1986, selling themed Geordie giftware and coal figurines. Collectables thrived as a family business run by Mr Lewis, his wife Barbara and their son David.
By the end it had three MetroCentre shops and 11 other stores in the northeast, Yorkshire and Cumbria, and had diversified into furniture.
Turnover was in the £9m-£11m range in recent years but pre-tax profits sank and last year it made a loss.
The last straw was not renewed recession but a potential trading opportunity – the approach of Christmas 2013. This created a demand for working capital which Collectables could not meet. So, in late September, instead of gearing up for the festive rush for ornaments and charm bracelets, it went under, owing staff a month’s wages
There have been no offers for Collectables as a going concern: KPMG has agreed a deal to sell stock and is marketing some of its retail space.
Ex-staff are claiming unpaid wages and notice pay from the government’s Redundancy Payments Office. Whether Mr Lewis, now 73, will start all over again is unclear.
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