Exclusive Update From Stanton Bicycles: The Recovery Begins

by 94

The news leaking out of a corner of the Peak District is true – Dan Stanton has successfully bought back control of Stanton Bikes (or Stanton Bicycles Ltd as the new business is officially called). There’ll be more detail to come and we’ll be chatting to Dan once he’s got a few things straightened out.

For now, Dan and the team have issued us a brief update over what’s been happening and say they’re very keen to get the full, transparent story out there. The administration was something that Dan never wanted to happen but became inevitable when the company’s long-standing financial backer had a change of heart. The business had managed to ride the Brexit/Covid rollercoaster and was in an optimistic, stock rich place but the sharp dip following the war in Ukraine prompted the investor to pull out in the hope of recovering money by dissolving the company or finding a buyer.

Different company name…same headbadge?

“After what has been a personally arduous and difficult period the news is that Dan Stanton was deemed to have the most suitable offer to take the business forward.’

They are busy behind the scenes getting everything in shape to get up and running again. The newly formed Stanton Bicycles (the ‘old’ Stanton Bikes ceased to exist once the administrator took over in November) will be a leaner, simpler operation initially just supplying frames. The product line-up will remain the same and the paintshop will still be creating all the custom finishes. However, there’ll be no in-house frame fabrication for now so, apart from existing UK-made stock, the offering will be the regular steel or titanium made by their long standing partners in Asia, prepped and finished as usual in the Derbyshire factory.

You’ll be able to buy through a completely new, more user-friendly, webstore that is currently under construction. The aim is to be open for business during w/c 13th Feb but Dan and his colleagues have asked everyone to please bear with them as they begin the process of coming back to life.

Stanton Switch9er Hannah
No more UK made bikes like this one for now!

Dan would like to place on record his sincere thanks to everyone, from customers to industry peers, for their support and encouragement during what has been an immensely tough time. 

“The outcome is more than I dared hoped for and I can’t wait to get back to doing what I love. This is a golden opportunity for a reset after a crazy few years, get our heads up and start looking down the trail with a whole new energy!”

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Dan’s got a pile of admin and housekeeping to get through before he can sit down with us for the full story, but in the meantime we asked him a couple of specific questions we know lots of people are asking: 

Will suppliers be out of pocket?

Our manufacturing suppliers – no. We are continuing with all existing arrangements both in the UK and abroad. Yes they are owed money but only in the context of the ebb and flow of supplying stock and we’re really pleased to have preserved the goodwill in these relationships.

Some creditors – yes. The only individuals ‘damaged’ by this are the directors – Me (Dan) and the outgoing investor. We’ve both taken a significant financial hit but for different reasons. Me because I want to stay, the investor because they wanted to go.

A couple of big operators (E.g. TNT and Paypal) have also lost out. Though we are also continuing to use them so they can’t be too upset about it either. Entities of that size seem to be used to this kind of thing.

Some customers remain out of pocket but we’re now in a position to fix that – detail below.

To be frank, the only creditor who really took a major hit was the outgoing investor. We worked together for a long time and it doesn’t make me happy to know they’ve basically written off a huge chunk of cash – but I didn’t choose this course of action. The administrators discovered that running an international bike-manufacturing operation and an e-commerce business isn’t quite as straightforward as some people seem to think it is! Over the course of the last couple of months we got to a point where they just understood the reality and actual value of what was here. The outcome is a sensible one in the circumstances and one that is by far the best for the integrity of Stanton Bicycles.

I’m also a pretty big creditor! But I’d rather have my company, in my hands, than press the panic button and try and recover previous loans to the business which were all part of trying to do the right thing – like the move to UK manufacturing for example. I’m here for the long-term and prepared to do the hard work that means Stanton Bicycles stands for something positive and supports not only me but others too.

What should anyone waiting for a bike or frame do?

I’d like to make it really clear that we will do everything possible to make sure no-one loses out and sincere apologies to those out there who’ve suffered the stress of trying to get an email or phone call answered by the administrator’s people when they were here. The administration process was not about having a fire sale and stiffing people – as is now evidenced by the outcome. There are two types of customer:

  1. Those who purchased from Stanton Bikes Ltd, just before we went into administration.
  2. Those who purchased from the company while it was run by the administrators.

We’re talking about a reassuringly small number of people but that doesn’t lessen the importance to us of sorting it out. Those in the first group can deal directly with Dan, contact us at Stanton if you don’t hear from us first (sorry, rather a lot going on!). Our plan with these unlucky few is to get them the product they want as soon as we are able. Our stock is still there so, depending on how complex the order was, we’re very confident we can come to a satisfactory arrangement with each person.

If you ordered from the administrator, PKF Smith Cooper, then you can claim a full refund from them. We will then very happily sell you a new frame at that price with all the lifetime warranty and support you’d expect.

While you’re here…

https://singletrackworld.com/wp-content/uploads/2018/12/interview-dan-stanton-build-buy-bikes/
https://singletrackworld.com/wp-content/uploads/2023/01/can-working-on-your-bike-void-the-warranty/
https://singletrackworld.com/wp-content/uploads/2023/01/tracking-the-health-of-the-bike-industry-in-2023/

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Hannah Dobson

Managing Editor

I came to Singletrack having decided there must be more to life than meetings. I like all bikes, but especially unusual ones. More than bikes, I like what bikes do. I think that they link people and places; that cycling creates a connection between us and our environment; bikes create communities; deliver freedom; bring joy; and improve fitness. They're environmentally friendly and create friendly environments. I try to write about all these things in the hope that others might discover the joy of bikes too.

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Home Forums Exclusive Update From Stanton Bicycles: The Recovery Begins

Viewing 40 posts - 41 through 80 (of 94 total)
  • Exclusive Update From Stanton Bicycles: The Recovery Begins
  • FB-ATB
    Full Member

    I know it’s easy to be cynical but he seems to be giving a very clear and honest explanation of who is losing out and why.

    The administrator alluded to this in their report- in a meeting they proposed to sell the company as the best option & this was agreed by the directors (including the £1m investor). Then the director owed the ££ changed his mind.

    chakaping
    Full Member

    as I read it, its the investor pulling out that was the trigger that has led to where they are now

    My reading was the investor pulled the plug because they had been throwing good money after bad in an unprofitable business.

    So I’d say it was Stanton’s previous trading that led to this. Shame he doesn’t say how he hopes it can become profitable now, apart from having a new website.

    1
    mert
    Free Member

    Shame he doesn’t say how he hopes it can become profitable now, apart from having a new website.

    By not selling complete bikes.

    The logistics of getting a complete bikes worth of parts together plus all the options as a small player is a major overhead. Just need one supplier to say “sorry, through axles will be a month late” and you’ve then got 20 bikes and 100 grands worth of stock you can’t sell for another 4-6 weeks. Or longer. Or ever if someone cancels.

    And over the last 2 -3 years, we’re not talking one month and one supplier, we’re talking most suppliers and several month delays.

    Breaking it down to 3 or 4 suppliers for frames only, makes things a whole load cheaper.

    chakaping
    Full Member

    By not selling complete bikes.

    Sorry, did I miss that he said that?

    frogstomp
    Full Member

    Shame he doesn’t say how he hopes it can become profitable now, apart from having a new website.

    no in-house frame fabrication for now” – presumably lower-cost higher-margin on the imported frames. Does take away a little of their USP… although I wonder what the ratio of UK to import frames is.

    4
    bjhedley
    Full Member

    Glad they’ve been reborn. I really felt for them over the past 2 years. I bought a bike in 2021 and it took the best part of 9 months. That was because anything Rockshox was supposed to be delivered by May was delayed until October, and shimano availability was so bad they were buying groupsets from Chain Reaction which I doubt helps the profit margins. When stock delays from the big boys like spesh and trek are into the 6 months waiting times, you can only imagine what it’s likes for the small brands trying to secure the scraps of component stocks. Not like they have the budgets to secure $10million of groupsets/forks. Guess who gets their orders first…

    Despite the delay, they couldn’t have been more helpful in trying to get a solution to get my bike to me ASAP.  They also partially refunded me for downgrading the groupset, despite supplying a one-up dropper over a brand-x and Hope BB’s/Headsets over generic.

    If one of Specialized’s backers pulled out over night and they went into administration, I doubt you’d see them offering to make good on debts and ensure customers still got their orders…

    FB-ATB
    Full Member

    My reading was the investor pulled the plug because they had been throwing good money after bad in an unprofitable business.

    So I’d say it was Stanton’s previous trading that led to this. Shame he doesn’t say how he hopes it can become profitable now, apart from having a new website.

    The directors (Dan & the investor) had engaged the advisors to review the business. They were told it was not viable as is and the advisors recommended selling as the best course of action. The directors agreed, only for the investor to unilaterally renege on that. How did  he think he’d then recover the cash if the business wasn’t solvent?

    “Stanton’s previous trading” is that Dan or the company you are referring to?  The investor was a shareholder and director since 2015 so would have been party to/had right to company information, not entirely blameless. He may have lost his capital, but the loans were interest bearing so would have had some ££ from the investment.

    mert
    Free Member

    The newly formed Stanton Bicycles (the ‘old’ Stanton Bikes ceased to exist once the administrator took over in November) will be a leaner, simpler operation initially just supplying frames.

    Sorry, did I miss that he said that?

    Looks like it.

    politecameraaction
    Free Member

    How do you run up a debt with PP anyway?

    PayPal: Could it be consumer chargebacks on credit card transactions?

    TNT: unpaid duty on inbound shipment, perhaps?

    mbforlife
    Free Member

    Could he not have invested the money into the company that he has used to buy it back with to stop it going in to admin in the first place?

    tomhoward
    Full Member

    No. The investor wanted his investment back, and initiated the administration to do so.

    Northwind
    Full Member

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    My reading was the investor pulled the plug because they had been throwing good money after bad in an unprofitable business.

    Sorry, can’t work quotes!

    So not necessarily unprofitable, a profitable business can still be a bad investment if the rate of return’s really low. Or, you can be like Maplin where the interest the “investor” demands is the only reason that the company is losing money so the actual business is profitable but the financial construct isn’t.

    My guess here is that the investor just decided that they were never going to see a good return- whether lossmaking, profitmaking, marginal returns, doesn’t massively matter- and decided to pull their funding rather than just leave it there growing too little/shrinking/stagnating, because opportunity costs means that all of those things can be the same as “losing money”.

    So, from that perspective they may not have “lost” money from this. Or more precisely, they haven’t lost money from the collapse and relaunch- they’d already lost their money, and the collapse is just the thing that turned it from a number in one column on a spreadsheet to another. In the same way as I own a motorbike stand, but I’ve not seen it for 10 years and I’m never getting it back from that dude of sv650.org that I loaned it to, I write it off today but I lost it at some point in the last decade, or possibly at the exact moment I loaned it, or possibly the day I write it off, or if I never write it off it can remain an asset in yet another column for another 10 years and it’s all literally the same thing but with different financial fiction.

    </div>
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    mbforlife
    Free Member

    The money that has been used to buy the company could have been used to save it. it could have been put it in months ago when he knew it was in trouble. It doesn’t add up. Surely the investor would not risk losing a million quid if there was money about that could have saved the company before it got into the state it was in.

    tomhoward
    Full Member

    Could it? How so?

    1
    chrismac
    Full Member

    shimano availability was so bad they were buying groupsets from Chain Reaction which I doubt helps the profit margins.

    As I understand it if you are a small buyer then it can be cheaper to by ex oem than buying through the official importer with small buyer discounts

    FB-ATB
    Full Member

    Surely the investor would not risk losing a million quid if there was money about that could have saved the company

    read the administrators report- the Directors engaged them initially to review the companies affairs & make recommendations. Their conclusion was to sell the company and the directors ( including the investor) agreed.

    The the investor changed his mind and told them to wind the company up. Dan was owed  £120k at this point too.

    weeksy
    Full Member

    Dan was owed  £120k at this point too.

    This is the sort of stuff that confuses me..

    Dan was owed it by who ? his own company ? Is that because techincally he’s an employee ? Or because he ‘invested’ £120k of his own money ? I don’t understand how if it’s your own company it can ‘owe’ you anything ? But maybe i’m missing something due to lack of knowledge of how all this stuff works.

    Sorry if i’m being dense.

    pisco
    Full Member

    A limited company is a separate entity to the individual. It is owned by whoever owns the shares.

    It’s quite common for someone to set themselves up as a director and shareholder, and pay themselves a wage/dividends. If the whole thing topples over, the debt stays the liability of the company (assets sold off to pay things off as much as possible) but the director’s personal assets (eg house) are protected.

    Loaning the company money will not have been a decision taken lightly, as you are suddenly putting personal assets at risk. I would only loan 120k to a company if I had a lot of faith in it and a personal drive keep it going!

    pisco
    Full Member

    Of course it may not have been a 120k in one chunk loan. Sometimes the director will not pay themselves much of a wage just to help things tick over during lean times. The debt therefore accrues over time.

    Obviously I have no knowledge of how things were in this case, just musing on the subject of loaning.

    cheers_drive
    Full Member

    Some people on here are absolutely clueless as demonstrated by the naivety and/or ignorant commentary. It’s clear that they know nothing of the reality of running a business.  Nothing wrong with that of course, but why feel the need to comment on something you know nowt about.?!

    +1

    There has been some suggestion that Stanton is acting like a dodgy Pheonix company. I very much doubt any of the directors of a real pheonix company whould leave a £120k directors loan before putting it into administration!

    FB-ATB
    Full Member

    I don’t understand how if it’s your own company it can ‘owe’ you anything ?

    An incorporated company is a legal entity in its own right

    Any money you put in that doesn’t involve share purchase, becomes a loan. Likewise, owners can take loans from the company, although if not repaid within a tight timeframe, there are tax implications.

    Sometimes the director will not pay themselves much of a wage just to help things tick over during lean times

    If they are the owner too, they shouldn’t be paying much of a wage- they should be allotting dividends.

    tomhoward
    Full Member

    There has been some suggestion that Stanton is acting like a dodgy Pheonix company.

    They’re just trying to fling as much shit as they can, hoping some sticks, to fuel their own ego.

    mbforlife
    Free Member

    Is it possibly to get information on wage payments etc. that would certainly quieten some of the critics and put other people’s minds at rest.  When things get messy, facts are good to quieten the ignorant .

    Speeder
    Full Member

    If they are the owner too, they shouldn’t be paying much of a wage- they should be allotting dividends.

    Most people who are not directors don’t make any distinction between the two – money out of the business to a director = “wages”. #pedant

    He may have allocated dividends but not taken them as an effective loan to the company.

    23
    stwhannah
    Full Member

    I have to read the comments sections every day, and I know how they can hurt. I’ve also spoken to Dan during this period and heard how upset he sounds. So I couldn’t stand by and watch the thread continue without saying something…

    We’re planning to talk to Dan at some length – hopefully for a podcast – in due course. But first, he’s got a ton of admin to sort out, and I’m on holiday. Since I was the last person from STW to interview him, it seems sensible for me to chat to him this time – I’ve already heard in depth what his plans and vision for the company were. Clearly, for a variety of factors, that plan hasn’t worked out.

    I totally appreciate that people don’t want to see a Sick MkII, but I honestly don’t think that’s what’s happening here. Dan’s trying to resurrect the company. For that to work, he’ll need all that goodwill that was extended to him when the administration became public (remember all those ‘ooh no, this is sad news, I love their bikes’ comments?). Shafting your suppliers and your customers would be an unusual way to go about keeping the love coming your way. I’d also note that it’s Dan’s actual name on the company, and it’s him that’s going to feel the hurt from some of the less than kind comments – not some faceless board of directors. I can only begin to imagine how stressful everything must have been – not just the administration process, but the time leading up to that, as things unravelled. Unless you personally have been screwed over by Dan – in which case feel free to email me and I’ll ask him some difficult questions when we talk – it seems to me that idle speculation about possible nefarious intentions can only serve to make someone who’s probably already feeling pretty crap, feel worse.

    footflaps
    Full Member

    Some people on here are absolutely clueless as demonstrated by the naivety and/or ignorant commentary. It’s clear that they know nothing of the reality of running a business.

    +1

     

    My previous employer went into liquidation owing over $20m to mainly very large organisations who just absorbed the debt. We were bought out of liquidation a few weeks later and then carried on using the very same suppliers (on rather onerous financial terms). It’s just business, a % of customers go bust every year owing money. It’s all factored in….

    thisisnotaspoon
    Free Member

    Dan was owed it by who ? his own company ? Is that because techincally he’s an employee ? Or because he ‘invested’ £120k of his own money ? I don’t understand how if it’s your own company it can ‘owe’ you anything ? But maybe i’m missing something due to lack of knowledge of how all this stuff works.

    Imagine in simplistic terms it’s a startup so there’s not lot’s of cashflow in and out, and we’ll ignore, import, vat, shipping, wages etc.

    You order 100 frames from Maxway at £200/each and owe them £20,000, so you transfer £20k from your account to the company account as a loan, then pay Maxway. That £20k is your saved up wages from your last PAYE job so you’ve already been taxed on it.

    You then sell each frame for £400, so the company has £40k.

    You pay yourself back that £20k loan (and if you charged interest, you would pay income tax on the interest).

    You pay 20% corporation tax on that other £20k profit making it £16k.

    You pay yourself a £16k dividend.

    The fact it’s a loan means you’re not paying tax on it each time you move it between .ltd co and personal accounts.

    The reverse is true if you’re a famous comedian, you stick all your income into Famouscomedian.ltd, then take a loan from that company tax free with no intention to pay it back.

    footflaps
    Full Member

    The reverse is true if you’re a famous comedian, you stick all your income into Famouscomedian.ltd, then take a loan from that company tax free with no intention to pay it back.

    HMRC are pretty hot on that – you’ll get taxed on it!

    https://www.gov.uk/government/publications/loan-schemes-and-the-loan-charge-an-overview/tax-avoidance-loan-schemes-and-the-loan-charge

    The fact it’s a loan means you’re not paying tax on it each time you move it between .ltd co and personal accounts.

    In the case of a director loaning money to a company they are a director of, it’s a genuine loan with no tax liable (although possibly on interest above base rate).

    weeksy
    Full Member

    Imagine in simplistic terms it’s a startup so there’s not lot’s of cashflow in and out, and we’ll ignore, import, vat, shipping, wages etc.

    You order 100 frames from Maxway at £200/each and owe them £20,000, so you transfer £20k from your account to the company account as a loan, then pay Maxway. That £20k is your saved up wages from your last PAYE job so you’ve already been taxed on it.

    You then sell each frame for £400, so the company has £40k.

    You pay yourself back that £20k loan (and if you charged interest, you would pay income tax on the interest).

    You pay 20% corporation tax on that other £20k profit making it £16k.

    You pay yourself a £16k dividend.

    The fact it’s a loan means you’re not paying tax on it each time you move it between .ltd co and personal accounts.

    The reverse is true if you’re a famous comedian, you stick all your income into Famouscomedian.ltd, then take a loan from that company tax free with no intention to pay it back.

    And the fact I understood none of that tells you why I’m glad I just work for a company

    chevychase
    Full Member

    Fair post @stwhannah – looking forward to the interview.  And I did love his bikes 🙂

    reeksy
    Full Member

    Adding to that I assume the people that were so upset when they heard the bad news about Stanton are not the same ones randomly speculating about the course of events.

    It says a lot to me that I’ve read positive comments from his former employees elsewhere.

    1
    idenry
    Free Member

    Hi, I don’t know if you’re on the Stanton Owners FB group but several people have posted on there in last few days that they’ve had quick refunds after contacting the administrator. So thankfully sounds like this is happening pretty efficiently now.

    ivantate
    Free Member

    Good looking bikes.   Doesn’t seem to be a scam but a chain of events leading to here.

    Any form of business must have been really tough recently but relying on investors for what is likely a small amount in their portfolio must be even more difficult.

    mbforlife
    Free Member

    How can you assume that? It could have been financially devastating for the investor. Has anyone looked in to that?

    tomhoward
    Full Member

    It was the investor who initiated the proceedings. The administrators advised to sell the business, as the best course of action. The investor went against this.

    Investments can go down as well as up.

    mbforlife
    Free Member

    Why would they have done this knowing they would more than likely lose everything??? There must be more to it, don’t you think? I read on another site that the company was insolvent. Seems a bit one sided, when Stanton has everything and the investor is left with nothing. Everyone knows you can’t trade when insolvent so the company had to go into administration. It doesn’t matter who initiated it, legally it would have to be done.

    tomhoward
    Full Member

    As I understand it, the investor was covering the shortcoming in solvency, got fed up with that so withdrew funding, hence the insolvency and administration. They will get something back from the sale of the company to Stanton Bicycles limited. I don’t know how much, no doubt that will come out later.

    You really are trying to dig up absolutely every little shoot of something that might make out this to be somehow dodgy. Why?

    wbo
    Free Member

    Could be lots of reasons why an investor might want to cut his losses, or need some cash in the short term and many of them won’t have anything to do with long term viability of Stanton as a business

    mbforlife
    Free Member

    Just finding it all very interesting and no one seems to be sticking up for those that have lost out. Everyone is struggling at the minute but it seems that it’s ok for some to lose a load of cash as long as someone else comes out on top.

    the-muffin-man
    Full Member

    Investor should be looking out for themselves. As has been said loads of times already you don’t invest million+ and take your eye of the ball.

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