For Richer or Poorer: when wedding businesses go bad…
In a recession no business is completely safe; those supplying weddings are no exception. In light of the news that Confetti has gone into administration with the loss of 94 jobs, we ask what happens when wedding businesses go bad…
A shock wave has rippled around the UK’s wedding world with news that wedding stationery supplier Confetti has gone into administration with the loss of 94 jobs.
The company, based in Manchester, comprises five retail outlets in Glasgow, Leeds, Birmingham, Reading & London plus its online shop. The company’s website reports that following their recent takeover by HUT the company has closed the shops until a full announcement on the firm’s future plans is made.
Confetti’s Web Editor, Belinda Hanks, said; “Confetti was sold last week to The Hut Group. It has since gone into administration. This will affect all our [website] users, I'm afraid because the online shop has already been closed while the administrators assess the situation. This is obviously out of our control.”
Naturally brides who have ordered confetti, favours, stationery and other wedding products are concerned about what happens now the business is in administration. On the company’s forum CathRow15 said “I placed a small order Thursday and had been planning to place more for my wedding at the end of September. I'm resigned to losing that order with all of this going on.”
Unfortunately, a large wedding business going bankrupt is not unprecedented. In 2009, gift list company WrapIt , Britain’s third largest gift-list service with a turnover of £7m went bankrupt, affecting 72,000 guests and 2,000 weddings.
Founder of the business in 2000, Pepita Diamond, speaking about how distressing the demise of a company in the wedding industry said, in her first interview since the business failed; “I completely understand how those brides feel. One bride emailed ‘I hope you die horribly.’ I was heartbroken.
“I didn’t sleep and felt ill from shock. I was constantly on the phone to suppliers trying to sort out deals for couples who hadn’t received their gifts. If I was a bride I would have joined them on their protests and sent angry emails… I am incredibly sorry.”
Heroes of the hour following WrapIt’s demise was Debenhams, the UK’s second largest gift list service, who offered couples who had a gift list with WrapIt a £100 voucher to those re-creating a list with their company instead.
Prevention is undeniably better than cure though, and for brides, worrying about the solvency of the companies they choose as wedding suppliers is one thing more to worry about in the run up to their wedding.
Fortunately, couples can protect themselves, for example, by purchasing products or services which cost £100 or more and paying all of the bill or just a deposit with a credit card. They can then claim their losses back with legal protection under Section 75 of the Consumer Credit Act. Visa debit or credit cards also have a Visa Chargeback system which operates in a similar way but within 120 days.
Wedding insurance can also guard against bankruptcy — in fact, of all wedding insurance claims, over 43% in 2009 were the result of companies going bust — with companies like Wedding Plan, Debenhams Wedding Insurance and Ecclesiastical Group Insurance offering policies from around £30.
With news on the company’s future expected soon from receivers RSM Tenon, it’s unclear as yet how many couples are affected, but certainly the news has cast gloom over an industry that is supposed to make couples happy.
"We're really saddened by the news that Confetti has gone into administration. The recession has hit the industry hard.” Says UKbride’s Rob Davis. “Thankfully, as a site, we're experiencing steady growth, with over half of all engaged couples in the UK now registered with our free-to-join site."
What is Insolvency?
The news does prompt the question of what happens when a business goes into administration, and what the term means.
“Administration means an insolvency firm has been called in to run the company, and get what cash it can for creditors by selling or utilising its assets.” Says Martin Lewis of Money Saving Expert. “Most likely the insolvency firm will simply collect any assets, try and sell what they can, and then distribute what cash remains to creditors. The cash is then usually dished out in the order of priority, which usually means secured creditors, insolvency practitioners, employees and finally, everyone else including customers...”
Confetti’s Existing Orders
Trading has been suspended with stores closed and the online shop currently unavailable. A decision from administrators is expected soon, which will determine whether the company can continue trading and whether current orders will be fulfilled.
Right now, some orders are being successfully fulfilled, whilst others — for out of stock merchandise, for example — are not; Bex2011 ordered from the store on Wednesday 11th August, with the order fulfilled by Friday. Others, like Laura Dewar, haven’t been so lucky; “I placed my order at end of July and the money came out of my account on the 28th totalling £147.08, I was told that two of my items were out of stock but that both should be in by 10th August. I have never received any of my order and am now out of pocket for my big day. I have no idea whether my order will be sent out or my money returned.”