Over 500 jobs lost as Carcraft goes into administration

Carcraft

Carcraft has closed with the loss of over 500 jobs.

It is understood that staff at the Rochdale head office were told the news at 10.30 this morning (Thursday 30 April).

Along with the head office, nine showrooms have closed.

Daniel Smith and Joe McLean, both Partners at Grant Thornton UK LLP, have been appointed as administrators to CC Automotive Group Limited, UK Car Group Limited and Pennine Metals A Limited, trading as Carcraft. This follows an appointment as administrators to Pennine Metals C Limited on 16 April 2015.

The Group's finance arm, All In One Finance Limited, 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, 500 employees across 10 sites nationwide. The Group sells over 12,000 used vehicles per annum at an average price of c£9,000 per vehicle.

The Group 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 Group also has legacy PPI claims.

The Group is heavily loss making recording losses of c£8m per annum for a number of years.

Tarun Mistry, Automotive Advisory Partner at Grant Thornton, commented: "The business model has failed to evolve with the changes in the used vehicle remarketing sector and regulatory environment."

A sales process has been on-going since February 2015 which was ultimately unsuccessful.

Carcraft will cease trading and all employees have been informed and have been made redundant. All employees were paid on 30 April 2015 for the month of April.

Carcraft customers with Drive Happy Plans (DHP), a warranty, MOT, servicing and roadside assistance products will no longer be covered and all elements of the policy will not be fulfilled by Carcraft. Communication to this effect will be issued to customers today.

Daniel Smith commented: "With great regret a conclusion was reached that it is no longer viable to keep Carcraft in operation. In order to prevent further losses it has been agreed with management and creditors to cease operations with immediate effect.

"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."

Rochdale Online tried to contact Carcraft but when questioned the phone was hung up.