A Newquay company which introduced Cornwall to ugg boots in the 1970s, is back in the hands of its former owners after collapsing into administration earlier this month.
The Celtic Sheepskin Co Limited is now operating as Celtic Sheepskin and Co from its Newquay base, after being sold for £60,328 in a ‘pre-pack’ deal directly after it went into administration on February 3.
Kath and Nick Whitworth, who originally bought the business in 1990, have taken on full ownership of the company, which trades as Celtic & Co and with new a managing director at the helm.
The company’s 52-strong workforce transferred with the business as part of the deal, but seven redundancies have since been made, as the business embarks upon developing a business model more in line with its original identity.
In 2011, private equity firm Piper – which backed mail order clothing company Boden’s meteoric rise – took a stake in the venture, with the aim of developing a premium lifestyle clothing brand on the back of the existing footwear business.
To achieve this, the Celtic & Co team was expanded and the business restructured, with a further investment made in early 2013.
According to administrator ReSolve partners, Celtic racked up more than £2 million in trading losses between May 2011 and November 2013, however.
Newly appointed managing director Emily Bates said that while the company had invested heavily in stock, Celtic’s customers had not bought into the ‘ambitious’ growth strategy.
Shareholders became unwilling to make any further investment, Celtic was unable to source third party funding and administrators were appointed.
A spokesperson for Piper said: “Unfortunately, very challenging market conditions led to insufficient demand for the new product.
“As a result, the founders have decided to buy back the business and fund a revised strategy, returning to the company’s heritage.”
Joint administrator Simon Harris said in his report that he and his colleagues had felt a pre-pack sale of the business would give its creditors the greatest return.
The business’s three biggest creditors, Piper, the Whitworths and the holding company waived their rights over company debts totalling around £7.5 million.
Ms Bates said that 33% of debts owed to unsecured creditors had been settled by the company as part of the administration process and that it was continuing to work on a ‘one on one’ basis with suppliers to arrange ‘ex-gratia’ payments where possible.
She said: “We are very passionate about being from Cornwall and working with local suppliers and are keeping working with 90% of our supply base.”
The business is now focused upon the development of the lines that won it a following, with business being conducted as usual via its website and customer accounts.
“We are returning to the heritage lines that people know and love us for,” said Ms Bates.