10 businesses that went bust in 2021
With the ongoing anxiety of Coronavirus looming over the UK, 2021 was always going to be a difficult year for businesses. Lockdown restrictions and supply chain issues proved too much for many businesses to bear. The Bank of England confirmed that a third of small businesses are now classified as highly indebted after months of government support. When that support ceased, many enterprises found themselves unable to cope. The Guardian reported that 1400 firms went bust in September 2021, the highest levels since the start of the pandemic. Numerous big names got swept up in the storm and took the plunge into administration. Here are just 10 of them.
Paperchase are one of the most popular stationery brands. Relying on footfall from city workers, the Winter lockdowns stripped them of their most lucrative important trading period. The hit took a significant impact on the business, and they went into a pre-packed administration, secured by administrators at PwC.
Prior to January 2021, the chain had 127 stores and 1,500 employees. Since entering administration, it has closed 37 stores and made 500 staff redundant.
This online organic grocer went under just before Christmas 2021. They had supplied over 10,000 customers with groceries that had come directly from farmers. However, after making losses of £11million in 2020, followed by losses of £10million in 2021, operating is no longer sustainable.
All trading, including deliveries, ceased on December 16th.
This musical instrument and technology retailer sadly went into administration after 120 years of operating. The business was founded in Warrington and operated six stores in Manchester, Liverpool, Chester, Leeds and Belfast. However, after all non-essential shops were forced to close, their high street sales dropped to nothing. Online sales couldn’t save them, as musicians’ inability to play in public diminished the demand for new instruments.
Administrators from Interpath Advisory sold off part of the business to Arranged Musical Options, including a warehouse and its 18 staff. One store in Chester will remain open, but the others have been permanently closed, causing the redundancies of 48 staff.
JTF Mega Discount Warehouse
In the Midlands and the North West, this non-grocery discount chain is another business that’s struggling. In ordinary times, November and December would be highly successful periods for the chain. However, the lockdowns on 2020 left a lasting impact.
JTF were in the process of being sold, but a later withdrawal from the prospective buyer landed the company in administration, causing 500 immediate redundancies. The intellectual property rights have since been bought by the Poundstretcher group, who have reopened nine stores. Three stores in Preston, Sheffield and Warrington, however, have remained permanently closed.
Also known as AW Retail Ltd., this luxury fashion label closed its flagship Mayfair store in the Spring. Swiftly after, they entered administration.
Launched in 1990, the company was a favourite of the royal family. They regularly supplied outfits for Princess Diana and the Duchess of Cambridge. However, the depleting need for luxury fashion across the lockdown periods of 2020 and 2021 saw sales take a devastating hit. Administrators from Smith & Williamson took control on May 13th.
Utility Point were just one of countless new energy suppliers to enter administration. Utility Point, People’s Energy, PfP Energy and MoneyPlus Energy all ceased trading in September alone, as market energy prices rose to record levels. Bulb Energy also entered administration in November.
Following completion of the Ofgem regulatory process, on 22 September 2021, Rob Croxen, Paul Berkovi and Mark Firmin of Alvarez & Marsal Europe LLP were appointed as Joint Administrators to the Company.
Brooks Brothers (UK branch)
With the ongoing practice of working from home, business attire is nowhere near as in demand. Suit retailers Brooks Brothers have struggled immensely in this climate. Their US parent company declared bankruptcy in July 2020 and were since bought out for $325million. Through the administration process, the UK branch has suffered, being forced to close the doors of its Regent Street store.
Well-known camera retailer Jessops is owned by PJ Investment Group, controlled by Peter Jones of Dragon’s Den fame. The company entered administration for the second time in 2021. The high street business had previously collapsed in 2019, prior to the COVID-19 outbreak. The proceeding lockdowns were clearly a hammer blow for the business, as their high street footfall vanished.
A restructuring of the business is currently ongoing.
Victoria’s Secret UK
One of the most famous lingerie brands, Victoria’s Secret actually went into administration in 2020. However, it has been unable to recover in 2021 and is now in the process of liquidation.
The Hummingbird Bakery
Based in London, this American-style bakery was bought via pre-pack administration by Acropolis Capital. Three of its stores were included as part of the pre-pack, with two other sites being excluded from the deal.
Like many confectionary businesses, they were unable to cope with the sharp decrease of in-person sales. During lockdown, delivery couldn’t recover the huge loss in sales.
Of course, in these turbulent times, it’s hard to say what will happen in 2022. The Office for National Statistics has reported that redundancies nationwide dropped to 97,000 between July and October 2021. This is a return to consistency after an unprecedented spike of 395,000 redundancies in the same period of the previous year. Hopefully, this could indicate that the worst of this COVID-induced crisis has passed. Alternatively, without the support of government relief funds, many businesses may continue to struggle as we head into 2022.