Caravan and motorhome firm Discover Leisure – with three main dealerships in the region – has closed two thirds of its branches and reported significant losses.
Interim results for the firm, which owns the former Barrons dealership in Darlington, employing 66 staff, showed losses before tax for the six months to March 1 of £9.5m.
The firm, which owned 16 branches across England and Wales, is to become a “leaner group” focusing on five of its larger sites, including Darlington, York and Birtley, near Chester-le-Street.
Along with Chorley, in Lancashire, and Delamere, in Cheshire, the five branches accounted for 60 per cent of the group’s revenues in the six months to March 1.
Yesterday, it confirmed that as part of a restructuring programme, it had shut seven outlets already, with a further three to close yesterday.
An outlet in Cardiff closed last year.
Seven of the closed properties are freehold, and will be sold.
Discover said the increase in losses, from £1.8m last year, was a consequence of a 39 per cent reduction in the market for new tourers and motor homes in the period and the need to liquidate excess stocks to generate cash in an oversupplied market.
Trevor Parker, chief executive of Discover Leisure, said: “Discover will continue trading through our five northern premier retail outlets and via our online shop, including our Darlington site at Burtree Gate that has enjoyed a tremendous start to our busy season.
“Our team at Darlington are very hard working and we look forward to continued success at this branch.”
Mr Parker said: “While we are currently enjoying a positive trading performance at the start of the high season, external pressures are such that certain areas of our business were not geared for growth or indeed survival and, as such, put the entire company at risk.
“National Caravan Council statistics continue to report that the overall market is significantly reducing year on year and, as a result, simply cannot sustain the current level of retail outlets.
“Store closures and redundancies are always regrettable, but this bold, pro-active action gives stability to our company and puts us in a better position to ride out the current recession.”
As part of plans for refinancing, the company is pursuing a company voluntary arrangement, a formal procedure under the Insolvency Act 1986, with the unsecured creditors of Signlease, a wholly-owned subsidiary of Discover, including HMRC.
The group has also agreed principal terms with both Royal Bank of Scotland and Bank of Scotland for revised facilities, including an eightyear term loan of £8m secured against the five remaining retail properties
we have just picked up a brand new van from discover in york - glad we got it now and didn't get snarled up in problems although it does make me worry a bit about warrenty!
bill the bus , i would buy from a more stable company you dont need hassle, i had hassle from them over a 6 month period. try robinson caravans i have had good service from them.
I bought some Kampa flooring/edging from them about two months ago and it took ages (about a month) to come. The first time I called them they said I would receive it within a couple of days and it didn't arrive. I left it another week or so and although they were great when I called them again I got the impression that things were not quite right if you know what I mean. I feel awfully sorry for the employees and I also hope no one gets caught up in the situation.
I can't fathom this out because we were at a dealership on Saturday in the West Country and the earliest he could get me a Bailey was September! He said it was total madness and that was borne out by the car parks at both dealers being chock a block and people waiting to look in vans we were looking at!
I've been going to dealerships since I was knee high to a grasshopper, er that might be 30 odd years now, and I've never seen anything like it.
So why were these outlets making a loss and reporting a 39% drop in business?
this company has closed all their branches in the south of england and not informed any of its customers what allternative arrangements have been made for service to the caravans they have sold. They have not considerd there customers or staff when re organising there company.I will never deal with this company again as over the last two years i have purchased two new caravans,and about £5000 worth of extras.I think the quicker this company folds up the better.
asan ex discover employee who doesnt know if and when we will get wages and commission have to have a say on this as we havent had much chance to air our feelings, I for one am very unhappy by the way we were closed with no word or warning ,and the "body" who pulled the plug was followed very closely by a firm not one nor two persons but the whole shedaddle! how do you think we felt bout that !! But its the fact that these "managing directors" have let our customers firstly very badly down and the staff as well! the security guys very quickly locked all access in and out of the park! I hope that my customers will have no problems with their vans/motorhomes as we(as sales people) have spent time and energy with these people and have got to know them very well!
To follow on from the above I hope that all my discover workmates particularly those that I worked with will all find jobs very quickly! The same to all the other branches which were close down hope you get sorted asap cos none of us deserved what we got, cos our branch was an ace one to be working in and it was very sad to see it all go! Just one big management cockup from those up top who didnt and still dont have a clue about the industry or the people connected to the industry,good luck guys!! miss u as well
thank god GO OUTDOORS has opened in Stockton just what we need up here. a trek to barrons anyway and not much choice. and very overprice. internet took over as they overcharged on lots of things.
Discover took over my local mendip branch couple year ago , and to be honest they were a little better than mendips, but from the beginning they cleared the shop there was hardly any caravan camping stuff in there , it was mainly waterproof clothing, boots and out door gear. it was a very dissappointing take over. they did seem to be always busy with their caravan sales but after my experience with the staff i wouldnt never by a caravan from them again. I remmeber chatting to one of the managers of the local branch just after discover took it over and was told there were problems from the beginning, some of the staff left because of them and the way the company was being run and that they didnt agree with it so they set up a rival caravan dealer not too far away, it makes u wonder if they too bigger bite of the cherry, and got snowed under with it all.
------------- Shels
Easy Camp Tornado 3, Vango Banshee 300 Pro, Airgo Air Genus 400
I recently ordered a mains unit from this company. When it arrived it was in a damaged box and was clearly a used item. The weatherproof cover on the switches was missing. It had been sent out in that condition, not damaged in transit. I am awaiting a replacement, but it seems to me this is a company deparate to cut costs. Wouldn't buy from them again.
Creditors of troubled caravan business Discover Leisure have agreed to a company voluntary arrangement, allowing some breathing space from its debts while restructuring takes place.
The CVA was granted for the AIM-quoted company's main trading subsidiary Signlease Ltd at a meeting in Leeds today, representing the second deal KPMG has pushed through recently. Sports retailer JJB was the first plc to hammer out such a deal last month.Creditors settled for a deal which will see them get 22p in the pound back on their original investment, but this is far higher than the amount they would receive under a normal administration procedure, KPMG said.
Mark Firmin, restructuring partner at KPMG and CVA nominee said: 'I am very pleased that the CVA proposal has been approved by 99.7 per cent of the company’s creditors.
'This high level of support indicates that the proposal struck the right balance between meeting the needs of the company and those of its creditors, which are expected to receive a dividend of approximately 22p in the pound; significantly more than would have been available to them through an administration.'
The move allows the business to continue as a going concern to keep trading and to continue the restructuring it began some time ago, and offers some security to the 300 company employees.
Firmin added that there would be more corporate casualties across the entire spectrum of the leisure sector in the near future.
'We expect to see further fall out in the leisure sector in the UK over the summer. In spite of the growing trend for so-called 'stay-cations', consumers are pulling a tight rein on discretionary spending,' he said.
'This has far-reaching consequences on the financial stability of the many and varied businesses in the leisure sector, from hotels to caravan retailers.'
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Topic: Discover Leisure shuts seven outlets
