IN THE RED
Used car dealership that was loved by thousands of Brits goes bust over £7 million debt – two years after major change
Staff are still owed over £145,000
A USED car dealership chain that was loved by thousands of Brits has gone bust over a £7 million debt just two years after undergoing a major shake up.
The firm previously partnered with one of Europe's largest manufacturers but completely changed its business model in the wake of the pandemic.
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Brymo Limited, which was known by its trading name Sentinel Cars, has collapsed into administration with its books found to be in dire shape.
The company used to hold a franchise with Volvo to supply new vehicles in the Greater London area.
However, in December of 2022, Sentinel bosses made the decision to pivot into the second-hand market.
Despite giving up its contract with Volvo, the firm continued to specialise in cars from the Swedish brand, selling and servicing second-hand models.
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Administrators were first called in in February and their assessment of the company's accounts has revealed some shocking figures.
Vehicle finance company Haydock is owed in excess of £1.8 million, while NextGear Capital is waiting for £635,000 and HSBC Bank is owed £269,000.
Perhaps worst of all, staff are still waiting on a collective £145,000.
Between those payments and debts to trade creditors, the firm is in the red to the tune of just under £7 million.
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Sentinel was trading at a profit from 2014 to 2021, but the withdrawal from the Volvo partnership saw the balance sheet tip the wrong way.
The administrators' report said: "The company experienced a downturn in trade because customers were reluctant to purchase used vehicles at premium prices and the company struggled to acquire stock at sufficiently competitive prices to maintain profit margins.
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"Once the Volvo franchise agreement was terminated, the company secured alternative stock and working capital funding facilities from a range of providers.
"The company fully utilised unit stocking funding facilities when used car prices were at an all-time high.
"However, as the production and supply constraints for new vehicles lifted, the value of second-hand vehicles declined significantly.
"The company therefore suffered from an unsustainable contraction in the value of the equity in its inventory of vehicles and started to rely upon alternative finance for working capital."
It added: "[We] are aware of concerns regarding the circumstances leading to the company’s failure and are continuing investigations.
"Further details will not be provided until it is appropriate to do so.
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"To the extent required, reports will be submitted to the appropriate authorities and action taken accordingly."
It comes after another dealership announced plans to demolish its current site and replace it with a £2 million luxury car showroom.
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