On 1 May an enforcement notice was posted on the factory stating that Learmonth Property Investment Co had entered the Whitehall Park site in accordance with its powers under clause 5.1 of the lease.
“As a consequence of the re-entry, the lease is forfeited and the premises have been secured,” the notice stated.
“No one can lawfully enter the premises unless they have been given authorisation by the landlord.”
Vehicular access to the site was also blocked off.
A source close to the situation said they believed Lettershop was months behind with the rent.
“The factory is sealed off. Locks changed and alarm codes all changed. Entrances barricaded,” the source said.
“Rent unpaid for six months and too much debt causing drastic action.”
Printweek understands that over the weekend Paragon Group – widely viewed as the most likely future owner of Lettershop – has been working urgently with FRP Advisory and the landlord to come up with a solution to the situation.
It's not known how much work in progress is effectively trapped in the factory.
Lettershop produces complex personalised direct marketing products and sustainable e-commerce packaging with its Eco Mlr range.
The future for the business has been in question since YM’s three web offset plants collapsed into administration at the end of March.
Lettershop, also known as TLG, and agency Go Direct Marketing were not part of the administration.
Representatives from Paragon have been seen at the site in recent weeks.
It’s understood that Paragon is working on full due diligence with the intention of completing an acquisition of the Lettershop business.
In the most recent results available, to 31 May 2020, Lettershop had sales of £19.7m and made an operating profit of £214,645. It employed around 180 staff.
According to the accounts, the business had a £575,000 operating lease related to land and buildings that expired within one year, plus a £2.02m lease that expired between two and five years.
Printweek has approached YM Group CEO Stephen Goodman for comment.
He said: “The landlord did take action during the weekend to restrict access to the site. The company has been in discussions with the landlord over the weekend and an agreement has now been reached allowing the company full access to the site again.
“Full access will occur later this morning, at which point operations are expected to resume as normal, with relatively little disruption.”
The Lettershop site was previously co-owned by the firm's former boss John Hornby but it's understood Hornby sold to new owners last year.
