Daniel Smith and Joe McLean, partners at Grant Thornton, have been appointed as administrators to the group of companies which trade as Carcraft, the multi-site used car supermarket, which has ceased operations with the loss of all 500 jobs
GT had already been appointed as administrators to Pennine Metals C Ltd, and the latest appointment is to CC Automotive Group Ltd, UK Car Group Ltd and Pennine Metals A Ltd.
The group's finance arm, All In One Finance Ltd which is regulated by the Financial Conduct Authority (FCA), is expected to be placed into administration shortly, once FCA clearance has been obtained.
Headquartered in Rochdale, Carcraft is the UK's seventh largest second hand dealership chain with an annual turnover of £120m. The group sells over 12,000 used cars a year across ten sites nationwide at an average price of around £9,000 per vehicle.
It has been heavily loss making, recording losses of some £8m annually for a number of years.
The administrators said Carcraft operates in a competitive market and has suffered from poor market reputation, lack of investment, a high cost base, expensive loan note financing and an insolvent balance sheet all of which have hindered investment. The company also has legacy PPI claims.
Tarun Mistry, GT automotive advisory partner ,said: ‘The business model has failed to evolve with the changes in the used vehicle remarketing sector and regulatory environment. Overall, this sector is still vibrant and represents a significant opportunity for the appropriate operating model to benefit from the growing and changing used vehicle market.’
A sales process has been on-going since February 2015 which was ultimately unsuccessful.
GT has warned that due to the nature of the situation, Carcraft customers with Drive Happy Plans (DHP), a warranty, MOT, servicing and roadside assistance product will no longer be covered and all elements of the policy will not be fulfilled by Carcraft. Communication to this effect is to be issued to customers today.
Daniel Smith, GT partner and joint administrator, said: ‘Carcraft will retain a skeleton staff to assist with the realisation of assets. In the event there are any approaches from interested parties post appointment we will react to these accordingly. It is our intention to explore with an alternative provider whether they could provide the roadside assistance element of the DHP cover at a favourable rate to former customers.’
