Furnishing wholesale business Stone the Crows failed in attempts to secure funding to save the business ahead of its administration.
Christopher Wood and Steven Hodgson, of Clough Corporate Solutions Limited, were appointed Joint Administrators of ATN Marketing Limited, trading as Stone the Crows, on 27 March 2025.
In the build up to its administration, the business suffered issues as a result of the Covid-19 pandemic, the cost-of-living crisis and increased cost of labour, shipping and operations, which all impacted turnover.
In response, the company sought finance throughout the period from multiple sources, but were unable to source funding including through government backed CIBILS loans. The business was being pressured by banks which resulted in directors taking the decision to perform a sale and leaseback on the main warehouse property during March 2023, which was owned by the associated property company.
The funds were then loaned to the company to repay its bank debt and support trading operations through its cashflow difficulties. This added an additional trading cost of monthly rent in addition to the other increasing cost pressures and a reduction of sales.
Throughout 2023 and 2024, the company’s Directors sought financing to replace the previously repaid bank debt but were unable to achieve funding whilst the company was in a loss-making position.
Turnover for the financial year of 2024 generated £1.96m, and while efforts were made to sell the Directors private residence to support the business, this proved unsuccessful. Due to its financial position, the HMRC applied pressure with the company failing to adhere to an agreed payment arrangement during November 2024.
Further attempts to raise funds were also unsuccessful, while a winding up petition was expected to be received from the HMRC, ultimately leading the business to implement insolvency proceedings.
Upon appointment, administrators concluded that a short trading period would be beneficial to maximise recoveries in respect of inventory stock. At this time, three of its 22 employees were made redundant. Inventory stock was sold to Dalman Properties Limited, a company connected by a common director.
As for creditors, Lloyds Bank Commercial Finance held a fixed floating charge to the sum of £88,000, which is expected to repaid in full, while preferential creditor employee claims totalled £6,300 and the HMRC is owed around £644,000. It is unclear if a distribution will be achieved on the latter two claims. Unsecured creditors are owed £2.5m, including a further £250,000 owed to staff, £376,000 in loans and £1.8m to the trade. It is expected that creditors will suffer a shortfall of £2.8m.
