60 Black Country jobs go as Carcraft goes into administration

Staff at the 13-acre Darlaston Road site were told this morning that the business was going into administration.

Daniel Smith and Joe McLean, partners at Grant Thornton UK, have been appointed as administrators to Rochdale-based Carcraft, the UK's seventh largest second hand dealership chain with 10 sites across the country and an annual turnover of £120 million.

The administrators said the group, which sold more than 12,000 used vehicles a year, had been heavily loss making and had recorded losses of around £8m a year for a number of years.

Mr Smith said: "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."

The group's finance arm, All In One Finance, which is regulated by the Financial Conduct Authority, is expected to be placed into administration shortly, once FCA clearance has been obtained.

A sales process for Carcraft hd been in progress since February, but was ultimately unsuccessful.

Carcraft has ceased trading and all employees have been informed and have been made redundant. All employees were paid yesterday for the month of April.

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

"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," said Mr Smith.

Grant Thornton had previously been appointed as administrators to Pennine Metals C, Carcraft's holding company, on April 16.

The group operated in a competitive market and had 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.

Taurn Mistry, automotive advisory partner at Grant Thornton, added: "The business model has failed to evolve with the changes in the used vehicle re-marketing 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."

Carcraft, which was founded in 1951, opened the Wednesbury site in 2001 and it employed more than 200 there at its peak. The site could accommodate up to 2,000 cars and had a 100,000 sq ft showroom.

Site owners Pennine Property Investments got permission to replace the site with a 200-home housing development in 2011. Carcraft was to have moved to a new site in Sandwell.

Carcraft's Liverpool showroom has shut earlier this month with the loss of 30 jobs with sales moved to Wednesbury.

Carcraft had changed hands in a management buyout, led by chief executive Robin Bridge, last year,

It had taken on six apprentices at Wednesbury last year as well.