Future of Douglas & Gordon lettings book is confirmed – but who's running sales?

Mystery surrounds the current position and owner of the Douglas & Gordon sales business as documents reveal the events that led to the brand entering administration in February before the lettings book was sold to its chief executive earlier this month.

It was confirmed in February that Douglas & Gordon had appointed Grant Thornton as administrator and documents uploaded to Companies House this week reveal that the brand’s chief executive and director James Evans has since purchased the trade and assets of the lettings business and debtor book of the company in a deal worth £515,000.

The deal excludes the sales side of the business, but the Douglas & Gordon website doesn’t show any new ownership and still appears to let potential vendors request new valuations and enquire about listing new properties.

Estate Agent Today asked Douglas & Gordon’s live chat service if it was taking new listings and was told that this is still possible despite Companies House documents showing the sales team has been made redundant.

The lettings purchase has been made through Brewham Holdings, a company setup by Evans on 14 February 2023.

A notice of administrator’s proposals from Grant Thornton shows that a month before, the company’s director, Evans, had been trying but failed to attract investment into the brand.

Grant Thornton was instructed to try to sell the business on 13 February – a day before Brewham Holdings was setup - but its report shows that while offers were received, none could complete before the administration date.

The report shows that the director attributes the insolvency of the company to a lack of an established lettings business after Foxtons had acquired the brand last year and sold the sales arm back to Douglas & Gordon’s management.

The company had been “heavily loss making and had never managed to breakeven trading levels,” the report said, adding that the wider economic environment and mini-Budget in September 2022 didn’t help.

A failure to secure additional investment was also blamed.

Grant Thornton revealed that there had been no interest in the sales business during the attempts to find an acquirer, so the majority of this team – made up of 50 employees - was made redundant once the company entered administration.

The lettings team was retained and six employees were also kept on to assist the administrator.

Grant Thornton said it received interest from four parties during the administration process and had three offers, one of which was withdrawn.

It said Evans’ offer was the highest amount and had less conditionality.

The document shows that the purchase includes 15 employees as well as the intellectual property rights, brand, lettings business, contacts, computers, fixtures and fittings and book debts of Douglas and Gordon.

Evans’ new business has also said it would assist in the completion of the Douglas and Gordon sales pipeline, worth £1.3m.

The deal excludes 12 premises and Douglas & Gordon’s investment in OnTheMarket, which Grant Thornton has indicated it will look to sell.

An evaluator report, released as part of the administration documents, concludes that Evans’ offer represents something different to the current business as it is “focused solely on lettings and with a much reduced cost base.”

Douglas & Gordon’s major creditor is HMRC, owed £755,259 for national insurance and VAT.

Grant Thornton said it expects to pay a dividend to preferential creditors, including HMRC and former and current staff, but doesn’t anticipate there being money left for unsecured creditors.

Its next steps are to reconcile tenant deposit and landlord funds, realise the company’s remaining assets, liaise with landlords of its former premises and finalise the brand’s tax position, hopefully before the administration period ends in February 2024.

Grant Thornton and Evans were both asked for comment.