Begbies Traynor sells motor repair centre out of administration

Administrators have found a buyer for the business and assets of motor repair chain Crossleys Accident Repair Centre. The news preserves 70 jobs across the North West.

Greater Manchester saw 23,666 firms operating under significant financial distress in the final quarter of 2021. In the case of Crossleys Accident Repair Centre, the pressures of the pandemic, and the government’s withdrawal of support mechanisms last year, ultimately proved too much.

The automotive body shop and accident repair centre was owned and operated successfully for the last 20 years by Martin Cross. However, the business was severely impacted from the number of lockdowns imposed as a result of the pandemic.

The crisis not only reduced turnover but the availability of key parts required for the repair of vehicles. Meanwhile, the inability of staff to work through lockdowns due to furlough, illness and isolation also severely affected the ability to trade profitably which was compounded by credit limits being reduced.

The Manchester office of Begbies Traynor was instructed to market the business and assets for sale as a going concern and preserve employment for the experienced and skilled workforce. This process led to the successful sale of the business and assets to M&B on 24th February 2022 through a pre-packaged administration.

Speaking on the news, Gary Lee, Partner at Begbies Traynor, commented, “We are pleased that this business with a positive reputation in the region has been sold as a going concern. The deal provides much needed continuity for customers and staff.”

However, heightened inflation and stagnant wages have placed the UK into a cost-of-living crisis. Amid this, consumer spending power is undermined to the extent that many companies are now facing a further hit to their profits – even as they try to rebound from the past two years of the pandemic.

According to Begbies Traynor, over 55,000 companies across the North West now find themselves operating under significant financial distress. Nationally, this rises 589,168 – a 5% hike on the previous quarter. But, pointing to Crossleys as an example, Lee asserted that restructuring processes may actually be key to returning many firms to financial health.

He concluded, “We will see more examples of businesses like this across the region that are on the brink of financial collapse but who seek to restructure, refinance and bolster their existing management teams to lead them out of trouble and emerge stronger in the post-pandemic era.”