The computer retail specialist called in administrators in August
Nearly 80 staff were made redundant amid the collapse of East Yorkshire electronics seller Ebuyer, which could see creditors miss out on nearly £30m. Administrators of the laptops and computers retailer say 79 employees of the Howden Dyke-based firm lost their jobs, while 48 have transferred to buyer Frasers Group, which snapped up the £136m turnover business for just £2.06m.
New documents detailing the collapse of the prominent employer show it had suffered a major slowdown in its market, coupled with tighter support from its creditors. Owners Mark Reed and Rich Marsden – who bought Ebuyer only two years ago in a £26m deal – tried to turnaround the business but were knocked back by investors when they asked for more funds.
A report from joint administrators at specialist insolvency company FRP shows a range of offers were made for the established firm, one as low as £1. Amid an estimated £1.7m owed to HMRC and larger amounts due to distributors, the company was forced into administration.
In its report, FRP said: “The company was initially impacted by a combination of factors, including a 20% year-on-year market contraction, post-Covid demand softness, broader macroeconomic headwinds, and a sector-wide tightening of creditor support throughout 2023-2024. Despite generating £136.5m in revenue for the year ending December 31, 2023, the company recorded a net loss of £1.7m, reflecting wider challenges across the retail and technology sectors.
“The withdrawal of credit insurance across the sector further constrained working capital flexibility, leading to increased cost of goods sold and compressed gross margins, resulting in an Ebitda (earnings before interest, taxes, depreciation and amortisation) loss of £4m in 2024. With approximately 90% of sales dependent on distributor supply, the company’s limited access to direct stock restricted its ability to secure higher margin products and scale its owned brand ranges, including Xenta and Alphasync.”
FRP said bosses had tried to stabilise the company and claw back margins by offering more products. The plan needed funding but third party investment was thought unlikely because of Ebuyer’s poor financial position.
Administrators added: “The company subsequently approached its existing investors to assess their willingness to inject further capital. However, following discussions, the investors confirmed they were not prepared to provide additional funding in the company’s current state.”
As previously reported by Hull Live, the future of Ebuyer was brought into question when its landlord filed a winding up petition against the company. Now, the documents show Urban Logistics Acquisitions 6 Ltd is owed an estimated £324,000.
Ebuyer was part of the West Retail Group of businesses which include Wren Kitchens – also based near Howden – until it was sold in 2023. At the time, buyers Mark Reed and industry veteran Rich Marsden said the business held “huge growth potential” and had talked of plans to expand into Europe, with more PC and gaming product lines.