Carcraft enters administration

On 30 of April, well known Car Supermarket Carcraft has called in the administrators. A sale process had been going on since February 2015, but no buyer could be found. Carcraft has therefore ceased trading and all 500 employees have been made redundant.

Headquartered in Rochdale, Carcraft is the UK’s seventh largest second hand dealership chain with an annual turnover of £120 million, 500+ employees across 10 sites nationwide. The group sells over 12,000 used vehicles per annum at an average price of £9,000 per vehicle.

According to the administrators, Grant Thornton LLP, Carcraft 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.”

Financially, the group has been loss making for some time, recording losses of around £8 million 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. 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.”

As a result of the business’ failure, Carcraft customers with Drive Happy Plans (DHP), a warranty, MOT, servicing and roadside assistance product, will no longer be covered.

Following the news, BEN made an approach to Grant Thornton in order to reach out to all concerned. Commenting on the situation, Nigel Rothband, BEN’s chief operating officer stated: “The loss of over 500 automotive jobs is a huge blow to our tight knit industry community, and we are urging those affected to get touch with BEN as soon as possible. Not only do we want to help safeguard against those who find themselves without employment but also provide practical help to get them through a very difficult and stressful time. When you suddenly find yourself out of work, it’s overwhelming with what to do, where to go and will I pay the bills. You don’t need to cope alone, one phone call to BEN’s helpline will provide this information and they will help you every step of the way“.