Almost 150 employees have lost their jobs after wholesalers Tree of Life and The Health Store collapsed this week, with administrators now searching for a buyer to rescue the business.
Interpath Advisory was appointed to Tree of Life UK Ltd and sister company Health Stores (Wholesale) Ltd, which traded as The Health Store, on 22 August 2022.
Parent group Health Made Easy is not yet in administration, but The Grocer understands this could happen later this week.
The two companies formed part of the UK’s largest independent health food and wellness products distribution platform, supplying a broad range of third party and owned-brand goods, food and drink, personal care, and vitamins, minerals and supplements.
The group employed 206 employees across the two sites in Newcastle-under-Lyme and Nottingham in the Midlands.
Administrators said the group had faced “a number of challenges” in recent months, including an unexpected sales decline following the loss of a large customer.
“Unprecedented market conditions” also impacted on financial performance at the group, which generated turnover in excess of £100m.
Interpath added that despite “significant efforts” to avoid insolvency, the directors decided it was in the best interest of creditors to place the companies into administration.
The administration resulted in 143 staff being made redundant, with a further 63 employees retained to assist the administrators.
Interpath is now exploring options, including seeking a buyer for the businesses, assets and intellectual property.
Joint administrator Chris Pole said: “Regrettably, the loss of business from a key customer, together with the effects of the well documented economic headwinds, including inflationary pressures, have been incredibly challenging for Tree of Life UK Ltd and Health Stores (Wholesale) Ltd.
“Our immediate priority is to assist those members of staff who have been made redundant and provide them with the information they require to make appropriate claims.”
The Grocer revealed in July that Tree of Life owner Health Made Easy was locked in talks with lenders to agree new facilities and secure its future.
Chairman Michael Cole told The Grocer at the time that Health Made Easy was looking to realign its banking facilities to “fit and support its revised strategy”.
“The group is facing up to the challenging circumstances of inflation impact and supply issues, as are many businesses at this time,” he said. “We are working collaboratively alongside our long-standing suppliers and customers.”
Health Made Easy had hired mid-market M&A advisor FinnCap Cavendish earlier in the year to explore the potential sale of the company and capitalise on strong 2020/21 growth, but the process ended without success.
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