Darren Cooper, owner of sinks and taps supplier Astracast, has admitted the company is “in the process of being wound up” after major production problems at its factory in Malta.
Speaking exclusively to kbbreview, Cooper said he had also been left “devastated” after an American consortium pulled out of a proposed takeover deal just before Christmas.
“The deal was nailed on,” he said. “We’d been talking to them for five months.
“We were incredibly close, the expectation from everyone, including the bank, was it was going to get done. It’s very frustrating and disappointing that we didn’t get over the line with it. I honestly don’t know what put them off.”
Cooper acquired the Astracast business in November 2017, claiming he would “take it back to great” by investing in its staff and introducing improved training, better logistics and a new brand identity.
However, only four months later, he was forced to put the company into administration with the loss of 42 jobs, blaming a broken tenancy agreement.
He described the company’s current situation as “going through the process of an orderly wind-up or wind-down, whichever way you want to classify it”.
He insisted the company was “still trading”, although most of the 42 staff have been sent home while a skeleton staff works to sell off as much stock as possible.
“The company isn’t at this moment in time in administration,” Cooper said, “and there are still people we’re talking to with regard to investment. We have been talking to a number of potential investors/acquirers over the past four or five months.”
Responding to claims that rival German sinks brand Schock had been involved in another failed deal before Christmas, Cooper said: “We were discussing things with them that haven’t come to fruition.
“The process we’re in at the moment gives us a bit of time. So if something was to come to fruition, then it’s not too late. But there are lots of potential outcomes and I don’t want to speculate at the moment. The people who have been saying we’re in administration for the past couple of weeks have got it entirely wrong.”
Cooper stressed that uncertainty over Brexit had played no part in Astracast’s troubles, which he admitted were “purely down to production’’.
“The challenge has been more factory-based over in Malta,” he explained. “Getting that factory fully commissioned and producing the volumes we needed it to produce was the Achilles heel for 2018.
“Orders have never been an issue. But when you’re commissioning a new factory, sometimes it takes longer than you might have expected. That damages the volume of product coming into your supply chain and, as with every business, you’re reliant on invoice sales to generate your cash. If you’re not producing as much as you’re required to produce your cash generation is weakened.
“We relocated our composite sink manufacturing side over to Malta and it was more challenging than anybody would have imagined. It was very difficult to get yield up to a level we needed it to be at. Skills were difficult to transfer irrespective of the levels of support. It took a lot longer to train the staff to produce a composite sink, which is more of a chemical process. These are problems nobody at Astracast envisaged or predicted.”
Cooper went on to reject industry claims that his decision to register a new company – Astrasinks – on December 18 suggested the company was about to complete another prepack administration deal.
“The US guys we were talking to were keen on using that Astrasinks brand, so it was registered for them,” he explained. “So if the deal had come to fruition, that would effectively have been the brand they would have used in other markets, so it couldn’t have been taken by someone else in the UK. But that will be wound up now. It’s not something we’ll need because that deal is no longer with us.”
Asked what his message was to retailers stocking Astracast products, Cooper said: “They’ve just got to be patient. As soon as I know something categorically is happening, you’ll be told. We’re doing everything we can to try to retain continuity. Sometimes things go against you.
“It’s been a very challenging period for a business that had a good set of prospects for this year. If we don’t end up delivering that, we’re all going to be devastated – that’s people who’ve worked for the business for a long time, me personally, and our customer base, who have been very supportive through some turbulent times. All we can do is keep things moving in a positive direction.
“If we don’t get to move forward, it will be a real shame. The people have been phenomenal. We’ve got a very good team and it will be a crying shame if it doesn’t end positively for them.”