Lessors Gain Control in Vashi Insolvency

Hickman Shearer Ensures Lessors Gain Control in Vashi Liquidation: An example for Distressed Asset Management

Hickman Shearer were a pivotal force in the positive outcome of the liquidation of Vashi, a prominent UK diamond manufacturer and retailer. Known for its rapid growth and high-profile stores, including its flagship in Covent Garden, Vashi faced an unexpected downturn when a winding-up order in April 2023 thrust it into insolvency.

From Growth to Insolvency

Vashi’s meteoric rise was matched by its ambitious expansion plans, including a new store opening in New York. However, the company’s financial troubles left behind a significant amount of assets, including: the contents of five retail outlets, a prominent London West End office, and a modern jewellery manufacturing facility. The insolvency presented a complex challenge for the equipment lessors who had funded the company just two years earlier. They faced a considerable shortfall and were burdened with issues related to asset identification, rent arrears, and asset realisation.

Hickman Shearers Actions

In the midst of this turmoil, Hickman Shearer acted swiftly and decisively. Within weeks of taking control, the firm developed a strategic plan in collaboration with all relevant stakeholders to ensure an effective sale of the assets. Their approach was not only quick but also strategic, focusing on seamless coordination and robust communication.

James Fox, Head of Leasing Services at Hickman Shearer, commented on the situation: “The role of a lessor during insolvency can be incredibly challenging. Often, they face difficulties in recovering payments or repossessing their assets. Poor communication with insolvency practitioners can further complicate the process and lead to suboptimal outcomes.”

Fox continued, “However, with a clear and pragmatic strategy, it’s possible to turn the situation around. Our approach in the Vashi case is a prime example of how effective asset management and stakeholder collaboration can yield outstanding results.”

A Strategic Success

Hickman Shearer’s strategy involved several key elements:

• Rapid Response: Swiftly taking control of the situation and engaging with stakeholders.
• Strategic Communication: Maintaining frequent updates and leveraging their expertise.
• Stakeholder Coordination: Working closely with landlords and lessors to navigate challenges.
• Efficient Asset Management: Quickly identifying and validating asset ownership.
• Targeted Sales Initiatives: Negotiating favorable terms with landlords and selling specialist fixtures and fittings through targeted retail sales and a successful online auction.

The results were impressive. The auction, which featured 300 lots including photography equipment, contemporary furniture, manufacturing equipment, and office contents, achieved a remarkable 97% sell-through rate. The campaign’s success was further highlighted by:

• A 40% open rate on direct mail
• Nine global editorial features
• A dynamic B2C social media campaign
• 335 registrants for the sale

Conclusion

Hickman Shearer’s adept handling of the Vashi liquidation not only maximised the financial outcome for the lessors but also set a benchmark for distressed asset management. Their ability to act swiftly, communicate effectively, and execute a strategic plan underscores their role as leaders in the asset management industry. For those facing similar challenges, the Vashi Case Study offers valuable lessons in navigating the complexities of insolvency and asset realisation.