Buying the assets through All Jigsaw Puzzles, a company set up specially for the sale, on 8 November, Brian O’Donnell and Ronnie Butler have retained the company’s 52 staff after Map Marketing became insolvent.
No dividend is expected for the company’s 97 creditors, who are owed a total of £856,000.
Map Marketing, which had operated under the All Jigsaw Puzzles brand since 2014, became insolvent in October 2022 after cashflow issues - starting in the pandemic - rendered it unable to service its debts.
O’Donnell and Butler, managing director and chief financial officer respectively, bought out Map Marketing from its shareholders in June 2020 in a management buyout.
In a statement, All Jigsaw Puzzles blamed its insolvency on the rising cost of raw materials, supply chain delays that tied up cash in inventory, and rising inflation and energy rates, which made production - about 80% of which was in-house - significantly more expensive.
Creditors to the firm include banks, HMRC, and a number of print suppliers.
Map Marketing’s single largest creditor was NatWest, to which it owed £287,000.
The firm’s issues with cashflow began in the pandemic.
Despite increased sales of jigsaws, its primary product line, during lockdown, the company took on a £400,000 CBILS loan in April 2020.
By late 2021, however, this had become insufficient, and it was forced to apply for an additional £100,000, granted by business bank The Funding Circle.
Cashflow issues were then significantly compounded by an erroneous estimate of 2021’s Christmas sales: around £100,000 below forecast, it meant a significant amount of the company’s working capital was tied up in stock.
These troubles were further exacerbated by the need to service the company’s debts, arrears to HMRC, and the ongoing cost of the 2020 management buyout.
The buyout, which cost £900,000 in total, had been split into 10 instalments; the £90,000 instalment due in April 2022 could not be paid.
Having expanded to 60 staff in 2021, from 43 in 2020, the company likewise faced significantly stronger demand for cash.
By August 2022, Map Marketing was unable to keep up its repayments to creditors, and sought advice from financial advisory firm Kroll, which would later handle its administration and pre-pack sale, which both took place on 8 November.
Kroll examined the company’s cashflow and sought offers of investment in September. None were forthcoming, and with the company reaching insolvency in October, Kroll sought buyers.
After a short marketing period - 24 October to a final offer deadline of 31 October, five working days - the only offer received was from the purchaser, which would be incorporated as All Jigsaw Puzzles on 1 November.
Map Marketing’s manufacturing equipment was sold for £30,000, and work in progress, stock and raw materials for £110,000, with all other assets passing over for a nominal fee.
According to valuations in the administrators’ report, Map Marketing held stock with a cost value of £646,000 - including £273,000 of finished goods - and £50,000 of unencumbered plant and machinery assets.
In All Jigsaw Puzzles’ statement on its purchase of Map Marketing, the firm said its management had decided to take on the pre-pack sale to preserve jobs and allow the business to continue trading. It added the team was “optimistic about the future of the company” after seeing growth in recent years in jigsaw puzzle sales.
O’Donnell said: “The growth in All Jigsaw Puzzles gives us confidence that we can create a new puzzle-focused company from the historical map business.
“We hope to be making planet-conscious British jigsaw puzzles in Hatherleigh, Devon for many years to come.”
