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Cartridge World UK asks for time to pay suppliers

June 6, 2013

Cartridge World Ltd., the UK Master Franchise, has recently written to their suppliers advising of changes within Cartridge World, and how they propose to address the issue of overdue payments to their suppliers.

Cartridge World UK's John Richardson

Cartridge World UK’s John Richardson

The letter, seen by The Recycler, from Cartridge World Chairman John Richardson explains some of the trading and organisational issues over the last few years, but that they are committed to paying suppliers in full by the end of October 2013. Suppliers are also informed about the recently announced potential partnership with Badger Office Supplies, which will see the process of storing, picking and delivering products move from Cartridge World in Harrogate to Badger Office Supplies in Chorley.

Richardson said in the letter that “this partnership will involve the purchase of current stock and a commercial payment that will enable Cartridge World to clear all its overdue supplier debt, as well as provide funds for investment in growth”.

One supplier who spoke with The Recycler commented that “we have been a long term supplier to Cartridge World and are happy with the contents of the letter and appreciate being kept informed”. Other suppliers appear less supportive, with one or two considering legal recourse. Another said that “we can’t agree to wait until October and will be discussing with them earlier repayment terms”, whilst a third supplier stated “our exposure is minimal as we deal directly with the individual franchisees”. Another supplier noted that “they [Cartridge World] were giving their distribution business to Badger”.

Chris Brooks, Chairman of UKCRA, the UK remanufacturers’ trade association, added: “I have been contacted by a number of my members over this latest problem with Cartridge World UK’s finances. They tell me that they are deeply worried by the lack of any kind of payment schedule and the refusal of anyone to reply to emails or take calls, and are concerned that the company is knowingly trading whilst insolvent.

“They also view the proposed transfer of all their stock to Badger Office Supplies as an attempt to place assets out of reach of creditors and defy retention of title.”

We asked John Richardson whether Cartridge World is asking suppliers to take a holiday on payments, and keep supplying them, and Richardson responded: “Cartridge World has regular discussions with suppliers on a range of opportunities and initiatives. In these discussions the suppliers are able to raise such issues with us. We are grateful for the support and service they supply the store owners.”

In closing his letter, Richardson wrote to the suppliers: “I reiterate our commitment to pay current invoices on time and to clear all overdue payments by October 2013. On this basis we ask you to consider ring-fencing the current overdue debt […] and to continue to supply Cartridge World. We commit to pay all current invoices on time and clear the outstanding amount by October. Our initiatives are fully supported by our holding Company, Cartridge World Group Holdings Ltd.”

Update – 10th June

Dennis Haines, the director of Badger Office Supplies, emailed The Recycler over the weekend to say: “David, as you know we are exploring the above. In your recent article, one supplier mentioned Cartridge World “giving the distribution business” to Badger. I want to put the record straight that, if the partnership goes ahead, Badger will pay goodwill and buy assets on a normal, arms-length commercial basis.”  [Ed: we are happy to set the record straight]

Update – 11th June

A Cartridge World supplier has also emailed today with the following comment: “We are a very long term supplier to Cartridge World and cannot share the negative statements written in about Cartridge World in this article. 

“Cartridge World has always fulfilled their obligations to pay us as a supplier and have always stood to their word. We do not share any of the concerns reported in your article and have found Cartridge World to be a very supportive partner and customer who works well with the supplier community.

“We have every confidence in our ongoing commercial relationship with Cartridge World and look forward to working with them as they grow their global network.”

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