Retail

Published: September 11, 2020 | Updated: September 11, 2020

Sold for £5k: the sum owners of ‘new’ Beales paid for name and IP going back generations

The flagship store of Beales in Bournemouth, shortly before its closure in March this year.
By Andrew Diprose, editor

£5,000.

The amount paid for the Beales brand name and the intellectual property.

For generations the name was as synonymous with Bournemouth as its beaches and gardens.

But in January this year the department store group Beales, founded in 1881 by John Elmes Beale, went into administration.

Two months later the last of its 23 stores closed.

The total shortfall for creditors was estimated at £28.3m.

It included £2.2m in PAYE and VAT.

The purchase of the brand name and intellectual property (IP) for £5,000, by New Start 2020 Limited was completed on June 19.

Four days earlier, on June 15, Tony Brown, a Director of JE Beale plc and Beale Limited, pictured left, was appointed a Director of New Start 2020.

Last month what’s described on its website as ‘A new Beales’ – now owned by New Start 2020 – reopened in Poole’s Dolphin Shopping Centre.

Details of the amount paid for the Beales brand name and the IP are included in a progress report by the Joint Administrators, Will Wright and Steve Absolom of KPMG.

The report covers the period January 20 to July 19 and was uploaded to the Companies House website on September 3.

It reveals that offers were received from three parties for the Beales brand name and IP.

New Start 2020 also agreed to pay all the legal costs associated with the transaction.

Both the administrators and New Start 2020 took independent legal advice.

The report states: “After taking into account the payment of legal costs, the sale of the brand to New Start 2020 Limited represented the best value to creditors.”

The 31-page report also reveals:

  • A ‘significant’ trading surplus – £4.47m – was made in the period from the start of administration on January 20 until the cessation of trading activity on March 19. However, the figure is expected to reduce as further trading costs are settled.
  • A total of 1,010 employees were made redundant with the closure of the 23 stores. A further 20 were retained and furloughed, although five were subsequently made redundant.
  • Unsecured creditors are owed more than £18m. The figure includes £10m to trade and expense creditors, £4.6m to connected companies, £523,000 in Corporation Tax/non-preferential PAYE and £1.7m in non-preferential VAT. The administrators say the unsecured creditors should receive a dividend but they anticipate “a significant shortfall”. They cannot confirm when, or how much, the dividend will be at this stage.
  • Preferential claims are estimated at £277,000 with the preferential creditors expected to be paid in full.
  • The Joint Administrators had incurred time costs of £2.15m as at July 19, based on 5,613 hours at £382.77 per hour.
  • The administration is due to end on January 19, 2021, but the Joint Administrators are seeking a 12-month extension until January 19, 2022.

The full report from the Joint Administrators can be found on the Companies House website.

  • See all our stories about Beales here and our interview with Tony Brown last October here.