The high street has one less payday lender after The Cash Store goes bust
Stockport-based payday lender, The Cash Store which has 27 high street stores across the UK, has gone into administration with the loss of nearly 120 jobs after the parent company applied for administrators on the 21st July 2014.
The Cash Store which is a subsidiary of The Cash Store Financial Services Inc based in Alberta, Canada, relied on its funding from its Canadian parent, but this was withdrawn last month. No surprise really when last years accounts show the subsidiary had a net worth of £-6,182,060.
The company has now entered into an administration with FTI Consulting appointed as administrators. Administrators have confirmed that 13 jobs have been lost at the Stockport headquarters.
The company or administrators have not confirmed if the collapse of The Cash Store is a result of the Financial Conduct Authority new rules which came into force this April. The FCA confirmed that around 100 of the UK’s 210 payday lenders had stopped offering services prior to the new rules coming into force, with the US-owned Cheque Centre being the biggest high-profile victim of the new rules.
Administrators from FTI Consulting said: “Cash Store was loss making and had been reliant on funding from its Canadian parent company which was recently withdrawn. Cash Store operated as a pay day loan business from 27 stores in the UK and was FCA regulated.”
“The majority of the stores were based in the north west of England and Yorkshire and efforts have been made in advance of the administration to seek a buyer of the business as a going concern. Unfortunately no offers were received for the business as a going concern. Therefore, the business is ceasing to trade with immediate effect and the loans have been sold to a third party.”
Customers will be contacted in due course by the purchaser of the debts with information on how customer accounts will be handled. Unfortunately all of the Cash Store’s 120 employees will be made redundant, the majority with immediate effect. “The administrators’ team are working with the employees to support them in their applications for statutory entitlements. All employees’ arrears of wages have been paid in full.
This news follows an announcement in February this year that the Alberta-based company said it was voluntarily delisting its shares from the New York Stock Exchange as its share price had plummeted 98% in two years.
Ironic, that in January The Cash Store said it was in talks with some of its creditors to address near-term liquidity issues that arose after its right to offer loans in Ontario, Canada’s most populous province, was suspended.
Cash Store’s loan book has been sold to Croydon-based debt collectors, SLL Capital.