BB&S creditors to receive less than 10% of money owed

BB&S creditors to receive less than 10% of money owed

The administrators of British Bookshops and Stationers has said it can only pay back eight-10p in every pound owed and expects the level of claims to increase.

A recent document published on Companies House said the former 51-branch bookshop chain owes more than £8.6m to unsecured creditors, which could rise further because it “understates the likely level of claims".

The report said: “In the joint administrators’ experience, given the nature of the business and the substantial lease obligations, the ongoing liabilities are likely to understate the level of claims which will ultimately be received.” It estimates creditors will receive between eight-10p for every pound it is owed.

The report, dated 14th February this year, also reveals that of 92 suppliers, 21 claims on stock were settled, 34 rejected and 37 were still outstanding. More than £33,000 was spent on consultancy fees and over £65,000 on paying restructuring specialist GA Europe’s management fee. The administrators have been paid on average £312 per hour since BB&S went into administration in January this year, following dreadful Christmas sales, which it blamed on bad weather.

Former BB&S m.d John Simpson bought the chain from Endless LLP when it had 39 stores and borrowed £2m from Endless to run the company. Simpson then opened 12 new stores and according to Endless partner Garry Wilson, paid back £1m of the money in November last year after a successful period of trade.

However, following “disastrous” Christmas sales, Wilson said the company missed his next covenant payment and in January asked for the £1m he had paid back again as well as “extra on top”. However, Endless refused. Instead, G A Europe bought the remaining debt and the company went into administration.

Endless partner Wilson told The Bookseller he believed the ambitious store expansion programme was a major factor in the chain’s downfall. He said: “I am really disappointed that it didn’t work but it would have been ill-advised for us to put more than £2m into the business."

Since the administration, W H Smith has bought 22 of the 51 bookshops, retaining 200 staff members. However, the remaining shops ceased trading and still being dealt with on a “lease-by-lease basis".