24 October 2000

Grimm News For Pet Product Manufacturers

UK manufacturers of pet & gardening products are reeling following the announcement that Gibbs-Palmer, Britain's largest distributor of horticultural goods based in Norwich, Witham and Alton, has gone into receivership. Close Brothers, the private equity company and a division of the merchant bankers, Close Brothers Group plc which own Gibbs-Palmer, confirmed that accountants KPMG have been called in to act as receivers by Gibbs-Palmer's bankers, Bank of Scotland. In 1995 Close Brothers Private Equity acquired a 40% shareholding in Gibbs Palmer and then, in 1998, the business was restructured and the Close Brothers Private Equity 1997 Fund acquired retiring managers' shareholdings. Close Brothers said it had paid less than £10m for its shares in 1995 and had intended to expand the business, but this collapse is a reminder of the truth that the higher rewards of private equity investment come with a higher degree of risk. The company have said that they will not withdraw the interest they are owed by Gibbs-Palmer (which resulted from a stock loan). Suppliers such as Peter Barton, (CEO) William Sinclair Holdings and other creditors are describing the news as disappointing and even a disaster and are calling for a re-affirmation from Close Brothers that they will support Gibbs-Palmer through its troubles. Gibbs-Palmer made a loss of over £1m on its £40m turnover last year. Copyright 2000 Steve O'Malley (UKPets). This article may be reproduced with permission of the author and correct attribution to the source.