Still profitable in 2020, Romsey-based Wessex Labels struggled to return to good performance following the pandemic.

Making heavy losses of £261,000 on a turnover of £1.7m in 2021, the company – despite strong growth in turnover of 17% to £2m – found itself posting a loss of £24,000 in 2022.

Struggling under the weight of three CBILS loans, it had also found skyrocketing costs cutting into its margins, with larger, better equipped companies able to undercut its prices.

Wessex Labels did not have any digital printers, and could not spare the funds to invest in them, the administrators’ report filed on Companies House said, adding that a shift in the market towards digital production had left the company ill-equipped to compete.

Turnover began to decline in early 2023, and the firm’s directors sought advice in March. 

Concluding that insolvency would be the best option, they began marketing the business. A number of parties expressed an interest and signed non-disclosure agreements, in order to gain access to a data room of information on the company. But no formal offers were received.

The directors made the decision to formally cease trading on 23 June, at which time the majority of the company's staff were made redundant. Two members of staff were kept on for one week to complete work in progress and maximise realisations.

The company entered administration on 10 July under the care of Carl Faulds and Nicola Layland of Leonard Curtis’ Fareham branch.

The administrators, now marketing Wessex Labels’ assets through Hilco Appraisals, expect realisations to be complete by the turn of the new year, at which point the company will enter creditors’ voluntary liquidation.

Wessex Labels' two directors, Mark Ralph and Martin Clarke, continue to oversee operations at Wessex Labels' smaller sister company, Tolarus, a specialist software developer for the food packaging label industry, which although a seperate trading company, operates out of the same address in Romsey.