Stanton Bikes Bought out of Administration by Dan Stanton
Photo: Tristan Tinn
Stanton Bikes is leaving administration as Dan Stanton has bought out the company.
Stanton Bikes Ltd entered administration on November 11 as Dean Nelson and Nick Lee, business recovery and insolvency partners at PKF Smith Cooper were appointed after a court petition by a creditor.
In a recently released statement of affairs for Stanton Bikes Ltd published on Companies House it appears that the brand owed around £2.14 million to creditors at the time it was brought into administration. While in administration the company was able to continue trading until a buyer was sought.
According to reports by Business Live Dan Stanton, the original founder, has now bought back the company under a new trading name; Stanton Bicycles Limited.
Both the business and its assets have been sold as a going concern to the new company owned by Dan Stanton. Stanton bikes is expected to continue trading with business recovery and insolvency partner at PKF Smith Cooper, Dean Nelson, saying this outcome will help to protect "the brand, goodwill and employment."
 | We are pleased to announce that the business and assets of Stanton Bikes Limited have been sold and will now continue to trade. Since it opened in 2011, Stanton Bikes has continued to establish a global presence in the biking world. However, recent financial difficulties have left the business in a perilous position. As the joint administrators, we always sought to sell the business as a going concern, so we are thrilled with this outcome protecting the brand, goodwill and employment. I am sure the revival of a household name like Stanton Bikes will be welcomed in Derbyshire and beyond. |
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New company must have an arrangement to pay back some creditors to be excepted by administrators.
Will be interesting to see how things go without a deep pocket investor backing the company up,
Technically you shouldn’t trade if insolvent but it’s common companies try to trade through it, I think my own company would have been technically insolvent for a while some years ago but we got through it, didn’t owe an investor a million quid though….
Thats right
Dan runs the company for the love it it, that’s clear and that’s why I do hope it works out for him.
Looks like the investor put in about £1million over a few short years with no real return.
One feels like a saviour stepping in to protecting his own name and the business he founded, the other sounds shady AF
It sounds shady yes. But the alternative is that nobody buys the assets and it all goes to junk/firesale as well as the debts never repaid.
It sounds messed up but it's better to have another crack at it vs. oblivion. People will get jobs again, existing customers get continuity. It's the creditors who lose out...but a good proportion will be able to take it as this is what happens sometimes when you are lending money.
Is it mismanagement? I don't know....but I do know things done changed in the last 12 months. When all the tech firms are laying people off...that means situation is bad.
I would think tech layoffs are the least bad as those companies seemed bloated AF. They've been riding the wave of free money for years and now they actually have to be sound. Don't think any big tech companies will be falling on hardtimes. Might just be fewer free lunches and yoga classes. I accept that I could be totally wrong on this, though.
But I get what you mean, it does all feel like the first echoes of a very large, distant bubble going pop.
In short, Stanton was trading poorly, investor had a million so out into company in the past few years, company found to be insolvent, Dan and him disagreed on what to do so investor called in administrators. The administrators run the company while they try to find a buyer, old creditors I don’t think get much. Dan sets up new company and buys stuff off administrators - their valuations for stock are all in the documents.
Does the investor or people the old Stanton are owed money to get a penny, I have no idea.
Business can be a strange old game.
That’s why business is mad - I know of a shop that called in administrators, sold the stock to his wife, wiped out a £100k HMRC bill plus his old suppliers and opened in the same premises a week later with different suppliers and his wife as director.
The Atkinson family were the investors. Significantly, the docs at companies house show that Dan had yet to submit any "statement of concurrance" showing he agreed with the process at the time of the meeting with the administrators, suggesting significant differences of opinion about the way forward.
At that time it was Robert Atkinson who was paying for the company to trade in November to the tune of 6,800 GBP for rent, salaries etc; it was his continued investment that kept it afloat.
The story has moved on again as of today... with the debt transfer to a German company being the latest nugget to see the light of day. See Stanton's FB page. It doesn't look like there is going to be any amicable ending for a while.
If it isn’t a scam move by the German company (who are apparently legit) somehow they have bought the old Ltd company Dan walked away from to setup the new ‘Stanton’ - it sounds like a complete mess if true.
You joke but if his bid was £1 and it was the best bid for the business then that's better than £0.
(I am sure he paid more than £1)
Sometimes things break down with other investors. This can be for lots of reasons - including nothing to do with the business they're both invested in. Collapsing the old business structure is sometimes the best approach as it allows everyone to claim and restart (mostly) cleanly and without ties to the old ventures/investors.
That's actually the cornerstone of a company (separate legal entity from the owners). I'd still be happy buying a Stanton bicycle.
Looks like Stanton was financially hammered, investor would put no more in and disagreed with Dan as to what to do so brought in administrators.
For the ownership to change money must change hands even if its a "nominal figure".
You need to be a little careful though, let's say you buy your parents house for a quid to try and dodge inheritance tax but they die before the end of the seven year window HMRC are coming for you as the assets were deliberately greatly undervalued. Companies are different here as they cost money in wages, rent, debts etc etc
If they made just 2 or 3 different hardtails, and did an incredible job with it... To me that is something.
- The new Stanton bikes company has purchased the old company and the condition to supply outstanding customer orders - unlikely as you would be down the list as a creditor.
- The new Stanton bikes company ships your order as it’s the right judgement call but they have absolutely no legal requirement to do so what so ever.
I can’t really see any other scenario.
Maybe the removal of debt repayments can rebalance things, got to have operating capital from somewhere though.
singletrackworld.com/2023/02/exclusive-update-from-stanton-bicycles-the-recovery-begins
I would love to know how much of the 2.1mil gets wiped or if the new company owes the investor, hmrc etc etc a big wedge, unlikely though surely as how would the new company survive with the old companies debts but no big investor?
Dan's offer may or may not have included taking on the old co.'s debts but if it was the best offer that could be achieved then it's the best outcome for people that are owed money.
It's quite likely a founder sees more potential/value in a business than an outsider.
I find it implausible to think he took on repaying the 2million or so debt, repaying that in 10 years would be £200k a year or 20% of the best turnover Stanton ever made (peak of covid they did just shy of a million) - even then the company didn’t break £100k profit.
Dan clearly loves the business, it’s the only reason it’s survived, it ain’t because it’s a gold mine.
Plenty of businesses have flogged revenue to get somewhere, surviving on investors/debt. Whether that thinking should apply to small ish bike co. I don't know.
I do hope that the reboot allows Stanton to do things differently.
It will be interesting to see where ‘firehouse design’ goes in the future.
I don't think Dan wanted this nor will the build up and process been anything other than horrible. He might have landed on his feet but I don't think that's by design.
To quote from the coveted press release.
"I’m also a pretty big creditor!"
Nothing like being a big creditor to make sure you get your slice of the pie.
" I’d rather have my company, in my hands, than press the panic button and try and recover previous loans to the business "
Beauty
Yes investments to up and down but aren’t often completely wiped to nothing and I assume most have no idea about the financial position of this investor.
I don’t think it’s greedy for an investor to expect some kind of return from an investment and I don’t blame him for going to the administrators when according to the accounts on companies house they were trading insolvent, as a director knowing this you have to take action.
I find it hard to see how an investor involved in the company for years being cut short of a million odd pounds is a ‘good result’.
I think it’s highly unlikely much money found it’s way back to the investor - where would the money have come from? - just 8 or less weeks of trading and no money in the bank and at its peak Stanton turned over less than a mill a year?
I am in no way implying Dan engineered this situation to benefit him, not in the slightest but the ‘evil investor’ line is pure bullshit.
If they have an @, let me know. I'd love to see them make a hash of that too.
It's more a pragmatic decision of whether it matters how long they survive or not.
I am a customer of theirs and obviously not great they may not have prevailed...but I was not worried. It's not junk they make. If it's a hardtail you are looking at then low risk I say.
If more lose money on the new company then that's a different matter!
Hopefully it just means more Stantons. The product is good.