A bridal fashion firm that went into administration last week, leaving hundreds of women across the UK without their wedding dresses, ignored normal accounting rules and kept trading despite being millions of pounds in debt, the Observer has established.
Some brides were reportedly left up to £2,000 out of pocket when all 15 retail outlets of Bridal Fashions Ltd, trading as Berketex Bride, a company which has operated for more than half a century, ceased business. Many had paid up front, leaving them with little hope of getting their money back.
The company’s sole director, Tsung-Hui Huang, expressed his “sincere apologies for the abrupt closure of the store and any subsequent inconvenience this may cause to customers of the company”.
In addition to stores in big cities and concessions in Debenhams, the business also operated at wedding fairs. The chain’s collapse was painted as another example of an established retailer succumbing to market pressures in difficult trading conditions.
Serious questions have emerged about the company’s book-keeping – and Huang’s role in continuing to run a business that appeared to have more debt than its sales could service.
Its latest accounts show the Lincolnshire company had a “deficiency of assets” of £6,987,288 during the year ended 31 December 2017.The only way it could keep trading as a going concern was through a £2.5m loan from a company called Topvantage Group Ltd, solely owned by Huang and based in the British Virgin Islands, a Caribbean tax haven.
The accounts reveal that Bridal Fashions was buying stock from a Taiwanese company, Pretty Fashions Inc, run by a relative of Huang. According to the accounts, Bridal Fashions owed the Taiwanese firm almost £2.8m at the end of last year.
Bridal Fashion’s accounts state: “The company accounting policy is to recognise revenue when orders are placed and a non-refundable deposit is received. The director is aware that this policy is not in accordance with Generally Accepted Accounting Practice, but has also provided for the future costs of satisfying these orders in order to match the sales against cost of sales in the same year.”
The revelation is likely to dismay brides who have been left out of pocket. Liz Healey, 21, a student and bride-to-be from Derby, told the Daily Mirror she found her dress at the Birmingham National Wedding Show last December: “It was a tea length three-quarter sleeve lacy number with a wee tiny ribbon around the middle.”
The dress cost £559 but she spent a total of £809 on alterations, again with Berketex Bride. “No one has that kind of money just lying about.”
The firm’s accounting practices will be examined by the company’s administrators, Wilson Field Group. “We have a statutory duty to investigate the conduct of directors in the period preceding closure of the company and encourage any creditors who have concerns over the conduct of the director and the events leading up to the insolvency of the company to email us,” said the administrator, Robert Dymond.
Wilson Field said it had united up to 80 dresses with their buyers and identified a further 90 which it hoped to get to their owners.
“As insolvency practitioners we often have to deal with the upset caused when staff are made redundant or where creditors lose money,” Dymond said. “In this case, hundreds of brides-to-be face their special day being ruined. For that reason, wherever it has been possible, we have tried to unite dresses with brides.
“For brides who had paid a deposit or paid in full, where their dress has been delivered to store, our staff on site have contacted them to collect their dress and make the final payment.”
“For dresses that had not been delivered to stores, customers are being advised how to get credit card/debit card refunds where appropriate.”
Huang did not respond to requests for comment.