North-East Business
Charles Hollywood folds after premier client's woes
11:03am Tuesday 14th February 2012
A TEES Valley advertising firm has gone out of business after its biggest client ran into trouble.
Charles Hollywood Ltd, based in Darlington, had been looking to recruit more staff after securing the national contract in December 2010.
But little over a year later the client's own financial problems have led to the Coatham Mundeville firm started in 1988 being wound up and staff facing an uncertain future.
Terry Kneeshaw, the founder and managing director of Charles Hollywood, would not name the client yesterday, but the Northern Echo believes it to be the UGO discount store group, which went into administration last week.
Administrators from The P&A Partnership immediately sold the UGO group to Poundstretcher, in a pre-pack deal, saving all 245 jobs.
UGO's sister company Haldanes Stores went into administration in June last year, with debts of £8.6m and the loss of hundreds of jobs, leading to doubts over the second brand's ability to survive.
As a result in the summer of last year concerned suppliers started chasing Charles Hollywood for payment, which Mr Kneeshaw met, restricting his own firm's cashflow.
Charles Hollywood is believed to have been owed a significant sum of money by UGO, but following the pre-pack deal last week the firm was unable to reclaim any of its losses and was placed in liquidation.
Last night Mr Kneeshaw said he would try to serve as many of the Charles Hollywood clients as he could through his second company Just Think, an online marketing firm also based at Coatham Mundeville.
"We won a major national retail account in December 2010 which should have been something we were shouting from the rooftops about," he said.
"Sadly that was connected to a group that went into administration in June last year, during which time we were massively exposed financially.
"We where owed money for the work we had done. It was our biggest account throughout 2011. We chased them for money and took legal advice but that has failed because that company has ceased trading last week in a pre-pack arrangement. It has left us high and dry."
Although trying to absorb some of the work into Just Think Mr Kneeshaw said he would not be able to retain all of the 13 Charles Hollywood staff.
"People will lose their jobs, there is no doubt about that," he said.
"But I have had a few weeks to reflect on it and I am going to do my best to make sure everyone is looked after as best we can."
Mr Kneeshaw said his accounts department had "worked like Trojans" to keep the business going, but to no avail.
Charles Hollywood should have been celebrating its 25th anniversary in business this year and Mr Kneeshaw added: "I have had 35 years as man and boy working in businesses and I have never let anyone down."