Sowester Simpson-Lawrence, one of Europe's biggest wholesalers of marine equipment, is on the brink of financial collapse.
One of the biggest companies in the European marine industry is teetering on the brink of financial collapse today (October 10th).
Sowester Simpson-Lawrence, the UK importer of Mercury outboards, Mercruiser inboards and sterndrives, and Sea-Doo PWCs, as well as being one of the Europe’s biggest chandlery companies, ceased trading on October 9th. “We have a serious cash flow situation,” said SS-L managing director John Buck, “because we’re owed a huge amount of money by the trade.”
SS-L had a meeting with its financiers (the Royal Bank of Scotland and venture-capitalists 3i), but the situation has yet to be resolved. “We hoped it would lead to a definitive decision, but it didn’t,” said Buck. “There’s no question that, if at all possible, the bank wants to support the company through its current cash flow crisis.”
Be that as it may, the fact of the matter is that when Sowester took over Simpson-Lawrence last year it was at a time when S-L were encountering difficulties fulfilling their wholesale and retail orders, and at a time when S-L were the UK distributors of OMC products (OMC went bankrupt earlier this year). On top of this, SS-L borrowed heavily to fund Sowester’s merger with Simpson-Lawrence, and they’ve had serious logistical problems moving Simpson-Lawrence stock and personnel to Sowester premises.
“The net result is we do have a very high debtor list,” said Buck, which he estimates stands at around ‘6 million. Combined with repayments on the ‘5 million borrowed to fund the Simpson-Lawrence takeover, SS-L’s finances are looking decidedly shaky.
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As yet no firm decisions have been made about the future of SS-L. Whether 3i and the Royal Bank of Scotland are prepared to throw more money at the problem and hope that SS-L can turn things around, or whether they pull the plug and get back as much of their money as they can, remains to be seen.