Signature fallout continues as debt mountain revealed
The four Signature Living businesses put into administration this summer owed a combined £56m, documents filed with Companies House reveal.
The Signature Living group grew rapidly through the late 2010s with an ambitious growth strategy based on opening glitzy hotels and wedding venues, mostly in redeveloped heritage buildings in city centre locations.
Some 60 businesses were operating under the Signature umbrella by the time Covid struck. Subsequent pandemic closures had a catastrophic effect on the group’s income streams.
Signature companies started to go under in April 2020, although founder Lawrence Kenwright continued to try and keep various projects alive.
In August, it was revealed that four further companies had entered administration. An administrator’s progress report has been filed with Companies House for each of them.
Signature Eden – £15.5m owed
The business, incorporated in January 2016, operates under the trading name the Dixie Dean Hotel at 57-59 Victoria Street Liverpool.
Joint administrators from Kroll Advisory were appointed to Signature Eden on 5 August, following the expiry of a loan facility provided by development finance provider Lyell Trading in June: the amount outstanding being £4.7m.
Prior to the administrators’ appointment, the hotel was being operated by UK Accommodation Ops under a management agreement, with UKAO then engaging Avensis Hospitality to run things day-to-day. Kroll has now removed UKAO, and is running the hotel assisted by Avensis.
Kroll said it is looking to find a buyer to take on the hotel as a going concern. Although there has been a delay in getting formal valuation advice, it is expected a local agent will be appointed to help market the asset. Kroll has also issued demands to UKAO for turnover rent of close to £300,000 covering the ten months leading up to Kroll’s appointment.
The waters are muddied by intercompany loans: as Kroll outlines, as per the company’s records, close to £4.3m is due from other group entities, with corresponding creditor balances of £5.3m.
After Lyell Trading, the other main secured creditor is SW Construction (No.2), which is owed £4.4m. While some return is likely for these parties, such prospects are unlikely for unsecured creditors, owed a combined £6.5m.
Rainhill Hall – £10.5m owed
Again, Lyell Trading called in Kroll on 5 August following the expiry of a loan facility. The operating company behind the Rainhill Hall Hotel and events venue was incorporated in 2017 and at the time of Kroll’s appointment owed £4.7m to Lyell.
SW Construction (No.2) is also a secured creditor, and is owed £3.7m. Unsecured creditors are owed £2.1m.
As with the Dixie Dean Hotel, Kroll and agents are working up a suitable marketing strategy to dispose of the business. Again, Kroll is working with Avensis Hospitality to run the venue at present. Although UKAO, which ran the venue from 2021, no longer has that role, 49 UKAO staff were kept on.
Shankly Hotel Preston – £22m owed
As outlined by Place North West this week, Kroll is mulling its options at the former post office building: to sell on the unfinished development or take out a loan to finish the 65-bedroom project before trading.
Lyell was once more the lender for the development project and is owed £12m. SW Construction (No.2) is owed £4m. Unsecured creditors are owed a combined £6.8m and are likely to miss out, although Kroll predicts a return of some kind for the secured creditors.
Signature had bought the freehold of the listed Market Street site from Preston City Council in February 2017, announcing a £15m project featuring a wedding suite and a 7,000 sq ft rooftop terrace.
Signature Living Lifestyles – total owed £8.2m
The party to call time on SLL was Henslow Trading, the holder of a qualifying floating charge over the 2015-incorporated business. Henslow is based at the same Gloucester address as Lyell Trading.
SLL owns the leasehold on the gym at Liverpool’s Shankly Hotel, the freehold being held by the associated company SLH, which went into administration in April 2020. The gym was operated by Liverpool City Council as Lifestyles Millennium.
The gym closed its doors for the Covid lockdowns and hasn’t been reopened. In a statement in September 2021, the council cited Signature’s issues as a concern, along with Liverpool John Moores University, which provided 80% of gym users, opening its own facility.
Kroll said that the gym leasehold will continue to be marketed for sale as part of the hotel to maximise return.
Henslow Trading is owed £7.4m. Unsecured creditors are owed £868,000.
