Aromantic, a Scottish supplier of natural and organic beauty products, has ceased trading and entered administration after nearly 30 years in business. All 11 employees were made redundant immediately before the administration process began.
Company background and operations
The family-owned business, founded in 1997 by Kolbjorn Borseth, who later handed control to his son Benjamin, sold oils, fragrances and other ingredients for customers to create their own creams, lotions, balms, toiletries and spa products. Its customer base included home crafters, salon owners and beauty therapists.
Aromantic traded through its own website as well as online platforms including Amazon and Shopify. The company, based in the Greshop Industrial Estate in Forres, Scotland, had a £1.1 million turnover.
Administration and asset sale
Christopher Horner and Kevin Pinkerton, of restructuring and insolvency practice Business Rescue Expert, have been appointed joint administrators of Aromantic Limited. They have secured the sale of the company’s assets, including its stock, websites and online platforms, to an unrelated party.
Kevin Pinkerton said Aromantic had traded well during the pandemic, but sales declined afterwards. He added: “The fall in revenue, combined with increasing raw material, shipping and employment costs, contributed to the business becoming insolvent.”
“Aromantic took out short-term loans to keep afloat, but the repayment requirements had a material effect on its cashflow. Over the summer, the company sought our assistance to explore ways to keep the business going,” Pinkerton said.
“Working with the director, we tried every avenue to enable Aromantic to continue trading or sell it as a going concern, but regrettably, a formal insolvency process was the only option.”
Understanding administration
Businesses can enter administration when they are unable to settle their debts, a situation known as insolvency. Payments to creditors or anyone owed money by the company are suspended throughout the process.
Plans to restructure the firm are developed, and an administrator from a qualified accountancy practice takes control. They oversee operations until a new owner can be identified. Creditors must receive as much repayment as possible, which is generally achieved through asset sales. Administration is a lengthy procedure and can take several months. A company can be put into liquidation and shut down if there is no way to make more cash.
