Learning from Paperlinx’s toxic legacy

Sarah Cosgrove
Monday, July 13, 2015

The collapse of the majority of Paperlinx’s UK operations has left a trail of destruction in its wake. But one of those whose business went under hopes lessons learned from the experience will ensure the success of his next business.

Surrey printer Alistair Buckman put on-demand digital and wide-format Camberley business Digital Print Zone (DPZ) in liquidation in May after suffering a Paperlinx-related cashflow crisis and building up debts of £400,000.

He had spent five years of long days, sleepless nights and working weekends building up DPZ from a £20,000 sole trader operation with aged equipment into a business turning over £750,000. But he ran into trouble after he decided to get help to grow his business to his target of £2m annual sales.

Buckman sold 60% of the firm for a nominal sum to investor Milind Purushottam Kangle in return for an injection of cash, only to see it pulled when Kangle’s biggest project lost a major contract.

Buckman started cutting costs, laying off two members of staff, but it was the administration of Paperlinx UK on 1 April that killed his company. He says he was getting a good discount from the supplier and ended up buying everything from it, not least because, due to proximity, he could order at 5pm and his order would be delivered at 9am the next day, while rival suppliers would not deliver until 2pm – useless for a 24 hour turnaround job.

According to Buckman alternative suppliers were inundated with requests for credit lines after the news hit. “We heard that Antalis had 12 people just dealing with application forms. We were an on-demand digital company and we never held a lot of stock. We had to buy everything up front for six weeks and that ruined our cashflow.”

He called in administrators on May 18, fearing delay would mean his assets would be seized by the bank, landlord or HMRC. Documents filed at Companies House on 3 June reveal DPZ owed £14,650 to employees in salary and holiday pay and £65,801 to trade creditors, including £32,540 to Canon.

Buckman, who advanced a sum to meet the cost of liquidation, is one of the biggest creditors at £34,689.

Receiver Ninos Koumettou of Alexander Lawson Jacobs said the company expected to raise in excess of £40,000 from assets, after finance agreements have been settled

Buckman says he helped his eight staff find jobs with other print companies and would feed work won through print broker AC Media Inc, a side-project established in 2012 with director Christopher Hope, and which continues to trade, to them.

“I was really angry at first. I’m getting married in October and I was relying on a wage. Nobody wants to have to tell their future wife they can’t have the things they want for their special day. But I don’t have time to sulk. A lot of the experience I’ve got through DPZ, even though it’s come to an end, has been very valuable. I’m sure AC will be better because of that.” 

Buckman and Hope have stepped up a two-year web-to-print project focused on the wedding market – the details of which they are keeping under wraps until it launches in a few weeks’ time, and have further plans.

“The first time I ran a business it lasted four years. We had a really good team of people, we got our name known, I would’ve carried on doing it forever,” Buckman says. “If I did it again I would probably be a bit more careful. I rushed into purchasing new equipment. I’d spread out my supply a bit more and beat them up on price a bit and play one off against another. We put everything with Paperlinx to get the best discount and we had a good relationship with them. No one could picture what was going to happen. 

“Now we pay £600 a month rent on an office, we won’t have a credit facility, we won’t have a cashflow issue. All the things that were difficult about DPZ, we’re going to avoid this time.”  

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