A high-end estate agency which closed unexpectedly in April is now reported to have been hit by low demand for homes marketed at a newly-opened office.
Hayes Sales and Lettings Ltd opened in Ledbury in 2004 concentrating on properties in the Worcestershire, Herefordshire, Gloucestershire, Monmouthshire and Shropshire areas.
Having been described by the Daily Telegraph in 2013 as one of the country’s 20 best small agencies, specialising in homes from £400,000 to £3m, the firm is believed to have hit difficulties when it opened a second office, in Monmouth, just over two years ago.
Insider Media says it has seen a report by administrators at Harrisons Business Recovery and Insolvency which says the new office "did not generate the profits that the directors had anticipated as the lettings market was less than expected in this area".
A cost-cutting programme was introduced late last year but Insider Media claims the report notes this coincided with poor sales.
Facing cash-flow difficulties, the directors sold the lettings book to a third party and then considered further options including seeking external investment and selling the business. The report says the company's reputation then began to suffer, leading to further reduced business and a rapidly-deteriorating financial position.
Harrisons’ report then says: "The decision was made that the offices should close immediately and the employees of the company should be made redundant. The following day, however, it emerged that a third party was contacting the company's clients in an attempt to gain its business. Since the company's client details formed part of its assets, steps were taken to protect them by filing a notice of intention to appoint an administrator."
Now the administrators have appointed Clarke Wilmott to assist in selling off the business and a sale is reported to have been agreed but not yet completed - and the buyer of the business is not known.
Harrisons has estimated that preferential creditors are owed £17,619 with £288,717 due to unsecured creditors. It has been estimated that about £44,000 will be available for unsecured claims.