Supermarket vegetable and salads supplier Bomfords has gone into administration. The firm - one of the UK's biggest fresh produce suppliers with varying volumes going into all the major multiples - is alleged to owe hundreds of thousands of pounds each to several of its own suppliers.
On Friday, Bomfords financial director Chris Wood denied to freshinfo the gravity of the firm’s financial situation. “I don't know where this has come from and I firmly refute it,” he said. But that evening administrators were called and by Monday they were at the firm’s Warwickshire headquarters.
Bomfords had stretched itself financially over the last four years with major acquisitions such as Gerber Fresh Produce in 2003 and JJ Barker and W Bailey in 2005. It is the industry's biggest casualty since Macleod McCombe was liquidated in 2001 and various trade sources have told freshinfo that the firm has a lengthy list of creditors.
Founded in 1990 by John Roberts, Bomfords farms more than 10,000 acres across the UK as well as importing its product range to give year-round availability.
But earlier this year the firm was the target of the Gangmasters’ Licensing Authority’s Operation Scallion when it was discovered to be paying below the minimum wage to workers supplied by labour providers and was reported to HMRC as all seven labour providers it used across three sites had their licences revoked in March.
The firm is being administered by Deloitte, which is hoping to agree a sales deal, ideally for the whole company, within the next three weeks. It is still continuing to trade while in administration from all five sites across four counties and subsidiary Bomfords Prepared Ltd is not in administration, although the Bomfords Group’s 75 per cent shareholding in the business is for sale.
Weak management has been at the root of the problems at the firm, admitted Andy Peters, partner in Deloitte’s reorganisations services practice in Birmingham, who also insisted Bomfords is doing “fine” in terms of underlying trading. “The problems have come about as the move to the Atherstone premises cost three times the budgeted amount,” said Peters. “It also made two acquisitions in 2005 and paid largely cash for those when that cash should frankly have been used to pay suppliers and pay for purchases.”
But Peters is speaking to a “large number of interested parties” already. “At the moment there is a lot of support from suppliers and those people that we are talking to are interested in buying the group as a whole,” he said. “We have other people to talk to that would be interested in parts of the business, but if I can, I want to sell the group as a whole.”
Bomfords has a turnover of some £150 million annually and employs 2,100 people, many of them seasonally.
“The group has a strong market position, with a UK market share of approximately 25-55 per cent across its various principal product categories,” said Deloitte partner Dominic Wong. “It is profitable and has an enviable customer base.”
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