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STAPLEHURST DRAPER'S FAILURE
Effect of Bus Service to Maidstone.
The advent of bus services to Maidstone was advanced as one of the causes for his failure, by John Albert Dann, Crampton House, Staplehurst, draper and outfitter, at his public examination at Maidstone Bankruptcy Court, on Friday. There were gross liabilities of £3,069 13;. 10d., including 92 unsecured creditors, amounting to £2,94-2 13s. 10d., which was the amount expected to rank for dividend. Assets amounted to £1,389 7s. 10d., leaving a deficiency of £1,553 6s.
Debtor said he commenced business on his own account in September 1914, when he pur¬chased the business at Staplehurst from his uncle for £1,965 10s. 2d. He had £50 free capital at the time. The purchase price was to be paid by instalments of £50 per year and interest on the capital at the rate of five per cent. His father became guarantor up to £1,000 and entered into a bond for that amount. There was still £1,000 and a few shillings owing to his (debtor's) uncle's execu¬tors, and his father was a creditor for £1,131 for money lent.
WITHDRAWALS IN EXCESS OF PROFITS.
The turnover of the business averaged be¬tween £6,000 and £7,000 a year, each year showing a small net profit. In 1923 the net profit was £171, in 1924, £219; in 1925, £42; and in 1926, £214. He admitted that although the business was making these small net pro¬fits, his withdrawals each year were in excess of these profits. In 1926 when the profit was £214, his withdrawals were £370. He admitted that in the four years before December, 1926. his withdrawals were £1,534, but the total profits over the same period were only £647.
Since December, 1926, he had kept no books of accounts except a system for book debtors. In the absence of any books the figures as to trading and turnover during the last three years were purely estimates. In 1927 the turnover was approximately £5,000. In 1928 it was about over £3,000. For the past twelve months the average was about £40 a week or £2,080 for the year. The average gross profit on the turnover, having regard to the grocery and drapery sales, was about 15 per cent. Last year's profit was about £312. Against that business expenses were about £513, leav¬ing an estimated net loss of about £200. Dur-ing the year his withdrawals amounted to about £250, which, added to the £200, gave a net loss of £450.
The Assistant Official Receiver (Mr. E. T. Sanders): Do you realise, Mr. Dann, that you have lost £8 to £13 a week? - Yes.
He first became aware he was insolvent about 18 months ago when he was pressed by creditors and found he was short of money. The causes of his failure were commencing with borrowed capital; the keen competition of the multiple shops; the advent of motor buses to Maidstone, which rather hit the country shop; bad debts, and high overhead expenses. He agreed that an additional cause was his withdrawals from the business. When he closed his bank account he bought goods with cash from the till. From July to the end of the business he had not even the record of a bank passbook. He had at least eight executions levied against him recently, and borrowed £200 from his father to pay off some of these.
The public examination was closed. |
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