Almost as soon as the ink had dried on the deal last Friday (August 30) which saw Swan Mill Group acquire the assets and goodwill of GBCC and its Waterwells Distribution brokerage business, the new owners set to contacting card publishers to establish whether they would be willing to continue supplying the company’s brokerage arm, thereby enabling a continuous service to retailers who are supplied via Waterwells. (https://www.pgbuzz.net/its-happened-swan-mill-has-acquired-gbbc/)
However, as Swan Mill (which owns Ling Design and Penny Kennedy) acquired the GBCC business from the administrative receivers it is not liable for any outstanding monies owing prior to the card publishing group going down (on Friday 23 August). With a creditors report not yet finalised by administrative receivers BDO Stoy Hayward and the date of a creditors’ meeting yet to be announced, publishers and suppliers are having to make the decision of whether to supply the new owners without knowing what percentage of their debts (if anything at all) are to be met once the receivers have done the ready reckoning.
While some card publishers are taking the decision to continue to supply Waterwells, under the more financially stable ownership of Swan Mill, others are smarting by the losses and are less keen.
Here, Stuart Caldwell, founder of Splimple shares his opinion: “I spoke to BDO yesterday and I’m going to work on the assumption that we’ll get zero, or next to zero (my reading, not theirs). Our loss is lower four-figures, so we’ve sustained a wound, but we’ll recover and won’t need to amputate. Others may have been more reliant on GBCC sales, so it could prove terminal in these less than buoyant times. As GBCC brokerage stock orders have slowed in recent months, we don’t have a worrying amount of stock in their warehouse. What is there we own – but of course it’s been bespoke stickered for GBCC, so would have to be unwrapped and re-wrapped, so it could be more cost-effective just to pulp it.
The GBCC brokerage business model seemed to me to built on very tight margins, giving little wriggle room. Retailers were understandably attracted by the idea of sub-contracting their card sections to a single entity – but maybe it’s time for them to reconsider. Ten years ago consumers went to garden centres because they offered something very different; with brokerage however, broadly the same range of product appears in hundreds of stores – so that point of difference has been lost. That’s perhaps why farm shops and country stores have grown in appeal, as they are the ones offering products not found elsewhere.
GBCC have sucked tens (or maybe more accurately, hundreds) of thousands of £pounds out of the industry, which will be lost forever. For us it will mean postponing one new range launch but for others the knock-on will be more tragic. Expect closures, job losses and less new product.”
Top: The Waterwells Distribution side has involved over 50 publishers through its brokerage supply system.
