The web-to-print custom clothing company appointed Mark Colman and Megan Singleton of Leonard Curtis joint administrators on 28 February, with the sale to Hyper Merch, the new business of Inktreadable directors Alexander and Amy Cunliffe, taking place the same day for £130,000. Hyper Merch now trades as Inkthreadable.

The deal was also submitted to the Pre Pack Pool for review.

“Amy and I founded Inkthreadable at the age of 17 and have loved working with our clients and suppliers. At the point of administration 11 years later, we are immensely proud of what the business has achieved, and it was an extremely difficult decision to enter into administration. 

“However, the pre-pack deal provided the best outcome for us to provide a sustainable future for our staff, our customers and our suppliers,” Alexander Cunliffe told Printweek.

Founded in 2013 by the couple, by 2017 Inkthreadable had grown to sales of around £1m with 12 staff. 

And while the company initially suffered during the pandemic, sales surged so quickly that the directors decided to move into a larger premises in Blackburn and take on more staff.

In 2021, Companies House records show the company employed 35 staff; by 2022, that number had swollen to 44.

Colman and Singleton stated in their Administrators' Report that following the end of lockdown, demand for Inkthreadable’s work – custom printed and embroidered apparel – fell dramatically to pre-pandemic levels.

Inkthreadable was left with more staff than it needed, a larger-than-required premises and leveraged machinery: at the time of its administration, it listed a Kornit Atlas Max DTF printer and two Kornit Avalanche garment printers among its encumbered assets.

Under the strain of a shrinking market and growing input costs, Inkthreadable’s cashflow suffered, and it struggled to keep up with creditors. 

In February 2023, Inkthreadable was introduced to Leonard Curtis by its accountants; by May, it had entered into a time-to-pay arrangement with HMRC, alleviating some of its difficulties.

Relief was temporary, however, and on 19 January 2024 Inkthreadable sought insolvency advice from Leonard Curtis. The conclusion of this meeting was that the company was effectively insolvent, and a pre-pack administration would produce the best outcome for the company and creditors.

According to the administrators, unsecured creditors were estimated to be owed £1.4m and there was not expected to be any form of distribution. The estimated total deficiency is £2.18m.

Robson Kay Associates was instructed to value the drop-shipping specialist, before marketing it alongside Leonard Curtis as a going concern. 

Of 20 interested parties, just three put forward offers. Two unconnected parties offered £90,000 and £101,000 each, subject to contract; Hyper Merch, the Cunliffes’ bidco, offered £130,000, payable on completion, with no complicating conditions.

The sale was completed the same day, and the firm’s 23 employees – about 20 fewer than worked at the firm at its height – have transferred over to Hyper Merch under TUPE.

Cunliffe said: “We extend our heartfelt thanks to everyone who placed their trust in us and contributed to Inkthreadable’s impact on the print-on-demand industry, including our past and present staff, suppliers and customers. 

“Operating a business in difficulty is an immensely challenging experience, both professionally and personally. It is evident from sources such as Printweek that many businesses and directors today face very similar challenges.

“Our intention was to find the best solution to continue to support these businesses and individuals, and the pre-pack deal with Hyper Merch Limited acquiring the assets of Inkthreadable Limited has allowed us to retain our team of 23 staff, fulfil customer orders and continue to support and trade with our suppliers who we are prioritising continued trade with.

“In recent months, I have had numerous private discussions with founders who have experienced almost identical challenges over the past two to three years but are unsure of which direction to turn for guidance or support. From my experience, and the feedback I’ve received from these discussions, being transparent with trusted individuals as early as possible is invaluable. 

“This hasn’t been an easy route to navigate, but many valuable lessons have been learned, and I welcome other business owners getting in touch if they want to talk.

“From this point forward, under the ownership of Hyper Merch, we are excited to accelerate the brand’s presence in the print-on-demand space and assist clients in further growing their own businesses. This is a new chapter; one in which we are deeply committed to rebuilding trust and value for all our stakeholders; one with focus on financial stability and innovation.”