Planet X – In Administration

Enigma can do ti repairs. There’s a few in UK who can

Why is an employee buyout any more tax efficient for the seller than any other kind of share sale?

Seller pays no CGT or income tax on the disposal (subject to certain criteria etc etc)

Yeah, Ti can be fixed easily enough by the right people and doesn’t necessarily cost a fortune. Plenty of people on Retrobike have old ti frames fixed.

Do enigma still do repairs? When I got mine done they were pretty close to turning away anything but their own bikes just because they were so busy.

a11yFull Member
OK, that’s Planet X on my shit list, ironic after me singing the praises of their bikes earlier.

Titus Mutsu, 3.5 years old, discovered a crack leading from the edge of cable port at top of downtube. Clearly manufacturing issue. Won’t be warrantied as apparently only two year warranty on Titus titanium frames at time of purchase, although it’s now a lifetime warranty which was introduced sometime after I bought mine, apparently.

Try and check out those “apparently”s, wayback engine or check any docs you have- they have previous for this, that was part of the problem I had- just straight up lying about the warranty period. It might be true here, but check if you can!

What are the tax implications of EOT?

Importantly for many business owners, an EOT creates two tax breaks: Those selling their shares may do so free of capital gains tax. Once a company is owned by an EOT, it can pay annual bonuses to its employees free of income tax.

The attractiveness to a owner disposal is you don’t need to actually find someone to buy it and the big one is you pay ZERO tax on the sale.

Note the EOT can issue bonuses tax free to its employees, but it doesnt have to.

There are downsides and if the company goes pop you will lose a big chunk of your sale. Tactically most people will get the company to leverage up and make big profits early on after sale at the detriment of risk, so it can pay out ASAP. If it kills the company once you have your money… Meh Whatevs. (Cynical Mode OFF)

Neil (SuperstarComponents)

@a11y For titanium repair have a chat with Pat @ Limit Fabrications https://limitfabrications.co.uk/ he should be able to help you out…

@superstarcomponents, @superstu – interesting, thank you, I never knew that. that’s a big upside for the seller…if the EOT can actually pay the price!

Saved!

https://www.cyclingweekly.com/news/british-bike-company-planet-x-saved-after-sale-to-private-equity-firm

Nothing ever goes wrong when a firm is taken over by private equity.

@a11y that’s how sales contracts and warranties work unfortunately. Would have been nice if they’d extended something to you but given they are a low margin business I think your expectations aren’t so reasonable.

I’m told ti is not difficult to weld, just requires rare equipment, call around local welders.

But if you do get it repaired, would it not go again, unless you get some reinforcement added?

I’m glad they’ve been svaed.

I hope they go back to their routes. At the moment all the emails have wireless shifting and the bikes are costing £££.

To me, px and oo are about good solid bikes between £1000 and £2000. I don’t think they have the brand name to sell bikes at over £3k despite the gears on them.

They were good at spotting trends early. 29ers, gravel bikes etc and making them accessible to people on a lower budget.

I find their road bikes range overlaps a lot and it just confuses me.

They were good at spotting trends early. 29ers, gravel bikes etc and making them accessible to people on a lower budget…I find their road bikes range overlaps a lot and it just confuses me.

About the third edit for this post, but a lot has changed. However I’m sure we always had a confusing range 🙂

Looks like they already had a large staff reduction as it was 61 in 2021, 68 in 2022 and bought with 33.

Even with a few of them being the owners who have probably gone separate ways, that’s still a significant drop.

Baaj Captial seem to have their hands in clothing mainly. Wonder if they will be any good with bike manufacturing, or dwindle that side down.

I hope PX continue and at least the staff that are left have got some good news in the short to medium term  – better than going to the wall totally.

20 years is a long time.

https://web.archive.org/web/20030422234832/http://www.on-one.co.uk/

aah, so according to superstar components, Dave sold P-X to the employee trust. For some reason, from the press releases I had the impression that he’d made his money, and was now giving the company to the trust. this impression was given by mention of Dave’s admiration for Hugh Facey who signed over his company to his employees.

words, eh.

Or is superstar wrong here, and doing Dave a disservice?

Or is superstar wrong here, and doing Dave a disservice?

Neil clearly said that he had no details of this particular deal. He was just explaining how it can work.

20 years is a long time.

Trust me, I can hold a grudge longer than that 😂

It can still be a very good deal for the staff even if you aren’t giving anything away. I now own along with a colleague the company I’d worked for 25 years. The owner didn’t want to see 35 years of work and the money in the bank just disappear. We were hit with 100% loss of work in a day and the very last people back to work

When the bounce back loan became available he took all the rest of the money out of the bank and we became the shareholders with a 50,000 loan but absolutely no personal risk. We are slowly buying him out but there is only a general agreement of payment schedules and he’s been very flexible.

At the moment it’s looking very good and we have a real chance of making a better future for ourselves and we have nothing on the line.

They are still selling hard. REDUCED emails every few days

Wonder how that works.   Is it customer roulette – when the receivers pull the guillotine release thats it money lots!?

I’m sad to see them go and hope they survive

I’m sad to see them go and hope they survive

Just in case you missed it above?

Saved!

https://www.cyclingweekly.com/news/british-bike-company-planet-x-saved-after-sale-to-private-equity-firm

British bike company Planet X’s future has been secured after it was sold to Winlong Garments Limited

Not the garment company I thought might have a hand in it…

Hope I’m wrong but…can’t see the ‘rescue’ by Winlong/Baaj being anything other than a
short-term fix.

Saved!

For now.

It very much depends on the new owners and their outlook.

I expect a radical streamlining of the various brands and names and possibly pulling out of market segments.

Being taken over by private equity is often bad for the employees. Sure, not losing your job right now is a good thing, but it is often the case that PE will want to sell in 18-24 months so will be utterly brutal. When it happened to me the new owners were complete arseholes and it was very much a case of “you belong to us now”.

Let’s hope that this can be a constructive resurrection.

20 years is a long time.

And it still made me laugh….

Let’s hope that this can be a constructive resurrection.

Interesting that the new owners are in the garment sector, could they be a previous supplier?

And Will they perhaps view PX through the same lens? i.e. they’ve bought themselves a readymade collection of cycle clothing brands with some bicycles attached?

Makes sense to me, high mark-ups a few of seasonal/annual sales peaks to ride.

I expect a radical streamlining of the various brands and names and possibly pulling out of market segments.

It needs it. A lot of brands with very little differences. Cut to three brands and give them some identity.

Titus for all titanium bikes.
Planet X or Holdsworth for anything road.
On-One for off-road and WTF is that for bikes.

Had a couple of their bikes and they were great. Mate currently has a Planet X ti gravel bike and loves it. Bought because of price not the brand. He wouldn’t have cared which brand was on it, but would make the overall line up make more sense.
On One is the only one of their brands that has a current following and a connection to its beginnings, the rest are just a shell of their former selves bought up as they went along.

It needs it. A lot of brands with very little differences. Cut to three brands and give them some identity.

Titus for all titanium bikes.
Planet X or Holdsworth for anything road.
On-One for off-road and WTF is that for bikes.

I’d agree they need to cull the brands/bikes but I think I’d go a bit more extreme possibly. Too much choice does not work for them.

On-One: becomes their only MTB brand they cut the range down to two frame one more XC-trail Al the other LLS Gnarr pitched Steel.

PX: Becomes the default Road brand, again like the MTB range go to a one of each approach; one Al and one Carbon, both Disc only (punters just won’t want rim braked bikes now).

Gravel/CX is the interesting Niche IMO, it’s still a popular niche there’s still money to be made there the Subset of cycling hipsters have migrated to, lots of punters are probably going to choose a Gravel bike over a Road bike now. So do they use one of their various existing catalogue of brands for that Niche or just slap a PX logo on it? For my money I’d just put a PX logo on them and only bother with an Aluminium frame for a while at least. They should carry on offering it as a Drop and a Flat bar (hybrid) option though.

I’d like to see them keep their build options sensible too, it doesn’t do them much good offering all sorts of misc groupsets (they’re flogging Chorus builds at present, Who actually wants to buy Campag on a Planet-X frame?!?).
I reckon they need to do two (maybe three) finish level options max from one brand (SRAM or Shimano) on most models but deliberately keep the range lean.

I’d be interested to see how well ‘Cues’ actually works out for an OEM like PX, I reckon we’re about to see a “practical groupset war” and I’m not sure who’s best placed to win…

Framesets can still work for PX, but if they’re going to sell built up bikes they need to make the offering lean and focussed, bare Frames are a secondary line and pricing needs to be consistent and make the full builds look like better VFM…

They could probably retain an Urban/fixed/SS/utilitarian type frame, but go very ‘Model-T’ with selling only one or two colour options Max, one build option only (plus a frameset) and if people really want a logo flog them a (PX/OO/Holdsworth/Titus/whatever) sticker pack.

Ditch the Ti, Stop selling so many brand names, get their COGs down by trying to sell fewer things in more volume.

All my uninformed, Armchair CEO opinion of course…

Edit: And Clothing, They definitely need to flog clothing their seasonal bundles, accessorises like arm and knee warmers, cycling caps, etc just with fewer/less prominent logos… They could do well if their new owners help them them priority/good pricing on clothing supply chains…

So…. as far as i can see in my quick skim of companies house (note this is public information and im not privvy to any other details, im more than happy to be proved wrong on my suspicions and presumptions.)

according to CW article

Baaj Capital – recently setup – dormant company until recently – looks like it does very little from its assets and liabilities being virtually identical – has a company value of just £1500 – “the venture capital company” has funded the purchase of a multi million pound company with presumably millions of pounds of stock (if they are selling stuff on naff all margin as it appears)

Through Winlong Garments Limited – which is owned by the person who owns Baaj – which looks like it does very little from its assets and liabilities being virtually identical – has a company value of just £30! Buys a couple of million in stock and takes on all liabilities of the old company.

Both owned by the person who has multiple personal entries on companies house to try and scupper the links between all the companies. Who has 36 companes/directorships. several in liquidation/dissolved, the rest appear to be mostly dormant companies which do naff all. the only ones i can see of merit are a few managing properties (probably just parking some cash investment) and a clothing importer with minimal turnover/profit/assets.

I don’t really get how this works and it just smells of a Tory government style tax dodge. Reminds me of the covid PPE deals where nothing value companies get epic deal income and then run away with the cash after a quick flip.  I’m sure there “must” be an innocent reason why a company with nothing can get a loan from another linked company with nothing, to buy a multimillion pound business with no sketchy dodges or tricks….

I don’t actually know how an Employee owned company flogging its own company to someone else works. i can only presume it gets put in administration and all the suppliers/HMRC dont get paid as i doubt theres enough to cover the debts. no idea to be honest?

Just putting it out there. ill watch and see what happens!

(my personal bet is they flog all the stock, pay all the investors/directors millions and then nuke the company not paying any tax/VAT etc)

Neil (SuperstarComponents)

Aren’t most VC buyouts generally opaque?

The publically visible ones always are, because it’s the only thing that stops people getting really furious about it.

Like, you know how Maplin died? Everyone thinks “oh Maplin, out of date, couldn’t compete in the modern world, never adapted or changed.” But while Maplin was in bad shape, it was actually still profitmaking, except for the loan repayments to its “venture capital” owners Rutland. After Rutland bought the company with borrowed money, they inflicted a loan on Maplin to repay that, at a 15% rate of interest- mostly tax free. And when Maplin did go under, they were a preferred creditor because they weren’t claiming as shareholders or owners but as secured lenders. (unsecured creditors got back 1.04% of funds due).

If it is a VC leveraged buy-out where the debt is lumped on PX balance sheet I’d not be optimistic of a good outcome, particularly due to the non-transparent nature of the new owners as Neil ^ indicates.
The business has gone into administration probably because it can’t afford its current liabilities E.g. cash flow, withdrawal of existing loans/credit. To take it on as a going concern, then saddle it with more debt isn’t going to end well.

The debt doesn’t worry me or the viability of them continuing. My concern is its being bought by a tangle of companies who appear to have no real money.  It gets really annoying when you run a genuine company not engaged in shenanigans which pays shed loads of tax when people are out there publicly and intentionally avoiding it (not that i know for sure that’s whats happening but it will be interesting to watch and see)

A company needs money and assets to get a loan, the banks don’t just give you a few million quid just for lolz. Venture Capital normally has some capital to spend….

Meh whatever, if it blows up and the government doesn’t get its taxes don’t complain when they don’t fund the NHS.

Neil (SuperstarComponents)

I remember watching a program once about a billionaire who said he couldn’t make any money when the economy was doing well and he just waited and saved all his money for a financial crash or when a business went under. He would then come in, buy up businesses and properties cheap, with cash so he could complete quickly. Their loss was his gain.

It will be interesting to see how this one plays out and how px / oo changes with the new owners.

The market always adapts and when a gap is left someone else will find the opportunity.

I give it 6 months – at best.

Northwind
Like, you know how Maplin died?

Similar story to Evans I think. VC seem to be operating as a self governing bank as its more profitable than actually running a business.

Similar story to Evans I think. VC seem to be operating as a self governing bank as its more profitable than actually running a business.

If they do that it is often because they just want a brand or similar that is part of the group/business.

Neil: you, for some unknown reason, are drawing weird and unjustified negative conclusions.

Baaj Capital – recently setup – dormant company until recently – looks like it does very little from its assets and liabilities being virtually identical – has a company value of just £1500

That statement you’re reading is from 2021. It’s now 2023. It’s not unusual to borrow money (from related or arm’s length parties) and have a particular company holding a particular asset.

Both owned by the person who has multiple personal entries on companies house to try and scupper the links between all the companies

This is just bullshit. Lazy or inattentive data entry produces multiple entries for the same person, as does automation. I’ve seen it hundreds of times. You’re accusing some guy you don’t know if deliberately manipulating Companies House records. Chill out, bro!

I don’t really get how this works

Mmm.

I’m with Neil.
Winlong/Baaj acquisition of PX will go tits up in 6 months.

As of the 19th the administrators where called in.

As of the 19th the administrators where called in.

Again?!

Again?!

No, same administration as two weeks ago but documents now filed at Companies House