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No buyer found for Cramlington based EJ Badekabiner

HOPES for a buyout of a bathroom-making company which collapsed for the third time in two years with the loss of 80 jobs have been dashed.

EJ Badekabiner
EJ Badekabiner

HOPES for a buyout of a bathroom-making company which collapsed for the third time in two years with the loss of 80 jobs have been dashed.

Although around 10 potential buyers had voiced an interest in Cramlington-based Badekabiner after its collapse in January, administrators have said they have come to nothing and they will now look to sell the site and land.

The company was forced into administration after cashflow problems caused by  the decline in the construction industry and the collapse of a major customer which owed it nearly £500,000. Administrators PKF had hoped to sell the business and that many of the 82 staff who were made redundant by Badekabiner’s directors would be able to get their jobs back.

But PKF partner Ian Schofield said: “I don’t think we are going to be able to sell the business as a going concern.

“We had a lot of interest, but they all wanted it for too little money.

“It would not have been a business of the same size again. The factory made bathroom pods for student blocks. There is just not the business in that market now. We decided to sell the assets and the land off separately.”

The firm had a potential order book of more than £8m when it collapsed and had been targeting revenues of £12m this year, but Schofield said that those orders had not come to fruition because of the decline of the construction industry.

“They couldn’t fulfil any of those orders because of the lack of working capital. Their potential customers said they wanted the product but did not say when and there is not the market there now,” added Schofield.

PKF had been working to keep contact with the firm’s customers and keep open contracts until Badekabiner was back on its feet but found that they could not.

Badekabiner owed more than £1m to suppliers, HMRC and to building giant Galliford Try, which owned 25% of the business before its collapse.

The firm had been mainly owned by York-based entrepreneurs Andrew Forshaw and Mike Hampton, who bought out a 75% stake from Middlesex-based plc Galliford last August.

The construction company had only owned Badekabiner since November 2010 when it had bought it out of administration. It had been run before that by Danish firm EJ Badekabiner, which moved into the former Dunlop plant in 2002 hoping to build it into a £50m business by 2008.

But the site failed to win the trade it needed and recorded a loss of £820,000 by April that year, which grew by £80,000 over 12 months.

Hopes for its success reignited in 2010 when, following the closure of its then Danish parent company’s main factories in that country, the work was moved to Cramlington – aided by a £200,000 grant from One North East.

Last year, Badekabiner completed pods for the athletes’ accommodation at the London Olympics stadia but now all its customers are in Denmark, which PKF said had been problematic for the company.

The workers made redundant in January were only paid half the wages due for their last month’s work.

 

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