Gateshead based Traidcraft has gone into administration, as a result of rising prices and the effects of Royal Mail strikes were two factors that the fair trade company highlighted as justification for the change.
The pioneer of fair trade in the North East, Traidcraft, has entered administration as a result of several economic pressures and the impact of strikes.
The Gateshead-based organisation, which was founded in the 1980s and is owned by almost 5,000 shareholders, announced the decision “with tremendous sadness,” noting that the impact of rising energy and transportation costs, the conflict in Ukraine, and the Royal Mail Strikes in December had hampered its recovery from the pandemic.
To minimise the impact on suppliers and creditors, administrators from Begbies Traynor were appointed to the company, according to the management, who claim that this was the “only honourable course of action.”
Tradecraft calls in administrators
Administrators where called in after several precarious years for Traidcraft, which employs approximately 40 people and was on the verge of failure in 2018 due to a decline in the value of the pound as a result of the Brexit decision.
When the company split in two, its charitable arm, Transform Trade, established a distinct organisation that, according to executives, was untouched by the administration.
Traidcraft stated that the resignation of CEO Robin Roth, who had been in the position since 2016, after a hiatus, had contributed to the difficulties in its finances until the end of March 2022, which show a turnover of £5.3 million and operational losses of £255,614. In reaction to a difficult market following the epidemic, a more difficult economic environment also compelled the company to examine its pricing and the variety of stock it held.
The losing company added that it had mainly stopped trading in foreign currencies and was obtaining its products from businesses in the United Kingdom. Traidcraft acknowledged that its viability was questionable in the documents that were revealed in September last year.
Heartbreaking for Traidcraft plc story to come to an end
The board of directors of Traidcraft recently released the following statement: “It is heartbreaking to bring the Traidcraft plc story to a close in this way, but we can at least take some comfort from the knowledge that we have been a major force for good in the ethical retail sector for over forty years. As a result of our advocacy for trade justice, improved policies and standards are in place to safeguard the rights and honour of growers and producers around the world.
“We want to express our sincere gratitude to everyone who has travelled with us as staff members, board members, shareholders, and suppliers. We want to express our sincere gratitude to our devoted group of “Fairtraders,” many of whom have been with us from the beginning. The fight against unfair trade practises and poverty is far from ended.”
Charlotte Timson, CEO of Transform Trade, promised to advance the progress made by Traidcraft. She stated in a statement: “Our goal is to change commerce such that everyone wins. Our current attention is on two things as we carry on with this effort.
“Supporting producers: Traidcraft has done amazing work with smaller producer groups over the years, assisting them in finding a path to the market when no one else could. In order to fill the void left by their departure, we are developing ideas to expand our work assisting small groups of farmers and artisans, like those for whom Traidcraft was founded.
“The system: It will always be challenging to trade morally within an unjust system, particularly during a crisis in the cost of living. The deck was stacked against Traidcraft from the beginning. By calling for changes to the overall trade system, our advocacy and campaigning activity strives to level the playing field. We’ve demonstrated in the past that it is possible, but we must continue with renewed vigour.”
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With over three decades of experience in the business and turnaround sector, Steve Jones is one of the founders of Business Insolvency Helpline. With specialist knowledge of Insolvency, Liquidations, Administration, Pre-packs, CVA, MVL, Restructuring Advice and Company investment.