Sunline Direct Mail closes after no buyer is found

Sunline Direct Mail has entered administration after no buyer emerged for the business during an accelerated marketing process taking place over the past few weeks.

Simon Thomas and Nicholas O'Reilly of Moorfields Advisory were appointed as joint administrators of the Loughborough company yesterday morning (26 June). The business had originally filed a notice of intention to appoint an administrator earlier this month.

The firm has now been forced to cease production and the majority of its circa-110 staff were made redundant yesterday.

In a statement, the business, which was established in 1978 as a contract packaging company, said: “The situation is exceptionally sad as Sunline was an industry leader with a very long-standing, skilled and loyal workforce.

“For many years it held the accolade of being the largest single site producer of polywrapped mail in the UK due to its unrivalled capacity and 24/7 operation.”

All work in progress within the company’s mailing division has been completed prior to the appointment of administrators.

Six staff have been retained for a few more days and will remain on site at the company’s leased premises, largely to assist with dispatching completed work into the postal network without disruption, to minimise the impact to clients.

Sunline chairman Nigel Maybury told PrintWeek: “Regretfully we haven’t found a buyer and I think that speaks volumes for the state of the market. We had about three enquiries where people were asking for more information, but ultimately it didn’t lead to an offer.

“Our clients got spooked by the notice of intent and a number of them wanted to protect their own businesses, so they left. We committed to those that remained to see their work through and that’s exactly what we’ve done. We’ve kept the lines of communication open to all of our clients to try and do it properly.”

He added: “We need to walk out of here with our heads held high. We’re proud of what we did achieve in all our years in the print and mail industry and we don’t want it to be all about where we’ve ended up.

“We’re at a low point at this time of the year and the market hasn’t struggled to absorb our work. We’ve given a shot in the arm to many of our competitors who would have picked up our clients over the last couple of weeks and I’ve not heard of anybody’s mail being disrupted because of our failure.”

Sunline had sales of £6.7m last year, a decline of almost 16% on the prior year. It reduced its operating losses from £352,000 to £60,829. At 31 December 2017 the firm’s net liabilities were nearly £2.6m.

Maybury attributed the company’s decline to factors including the general decline in the UK letters industry, competitive industry pricing leading to a loss of some clients at the end of last year, and a fall-off in demand due to the introduction of GDPR. The plastics backlash following the broadcast of Blue Planet II also impacted the business.

“June is always quieter, and we’d allowed for that, but the final death knell for us was a June order book that was significantly behind what it needed to be for the business to break even,” said Maybury.

“We then looked forward into July and felt it could well be very similar so our parent company CEPS [which owns an 80% stake in the business] looked at it and said they couldn’t fund us through that period. They said it would suck too much cash and it wasn’t a position they wanted to support.”

The company’s assets include seven Sitma polywrapping lines, four Sitma paper enclosing lines, Canon Océ continuous feed printers and various mono cutsheet printers, guillotines and folders. An asset sale overseen by Hilco is currently underway.

Maybury, who bought Sunline via a management buyout in 1997, said some of the company’s staff have already been approached by local competitors.

“And they have done so with our blessing – one of my objectives over the last few days has been to put it out there that there is a lot of skills here. Some people have probably started jobs already and some may have jobs lined up.

“And the response from customers, former customers and people that know us in the industry has been overwhelming and heart-warming. And not only clients, but also the workforce and their attitude to get the job done and do the right thing, even yesterday.”

Maybury added the size of trade creditor claims would be “well into six-figures”.

“Many people within the trade have been badly affected by this, and it’s unfortunate.”

With services including mailing and polywrapping, data management, paper envelope enclosing, pick and pack, response handling and fulfilment services for the e-commerce sector, the business worked for clients including JD Williams, Boden, Jacamo and Nauticalia.