AM understands that the group’s finance partners, Banco Santander and Fortis Bank, withdrew their support for the business after mounting cashflow problems. A shareholder in the group says: “The problem was too rapid expansion of the business, coupled with a lack of support by the finance companies. I had no idea this was coming, although I’d been aware of dwindling stock levels and there was quite a bit of over-age stock.
“Carshock wasn’t big enough for the finance companies to want to stop this from happening.”
Around 70 staff face possible redundancy as its seven outlets and online retail operation have all ceased trading. Phones at its head office in Gateshead have been cut off.
The group announced its demise to customers with a temporary web page simply stating: “Thanks for the memories. RIP Carshock 2001-2007.”
That has been branded “insensitive” by customers who fear their deposits will not be recovered. Management appear to be confused about the legal status of the company. Managing director Mike Porritt claims the company isn’t in administration, but told local press he couldn’t comment further “because we are still talking to the administrators”.
Porritt had previously made ambitious claims about Carshock’s potential. In 2004 he said it would open a new site every three months and would grow to 28 sites and £90m turnover by this year. However, its most recent accounts state turnover at £18m.
In 2005 he proposed a franchise model, with 20 Carshock franchisees appointed in major cities nationwide by 2008. It failed to sign up a single partner.
Porritt registered a new company, Carshock North East Ltd, at the end of January and it is suspected he may attempt to salvage part of the group. He opened Carshock in 2001 in Gateshead and added sites in Newcastle, Darlington, Middlesbrough, Hartlepool, Leeds and Sunderland. The Hartlepool outlet only began trading two months ago.