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Discover Leisure customers lose deposits

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Customers who paid deposits to Discover Leisure using anything other than a credit card are unlikely to get their money back.

The motorhome and caravan dealer went into administration on October 14 – midway through the NEC show – leaving many customers unsure about what would happen to their deposits, their ordered vehicles, spare parts they had paid for and even their motorhomes that were left with the company for repairs or for storage over the winter.

Discover was trading up to the evening before it went into administration.

Since then, MMM has been receiving reports from readers who have paid deposits for new motorhomes, ordered (and paid for) accessories and spare parts, and even motorhome owners whose vehicles are in Discover’s possession; whether that be in its repair centre or storage facility.

The administrator, KPMG, has told MMM that: “Those who paid by credit card should contact their credit card company about a refund. Customers who have paid on debit card or cash will be unsecured creditors of Discover Leisure. Unfortunately it is unlikely there will be a dividend for unsecured creditors.”

As administrator, KPMG has no legal obligation to repair any motorcaravans in its care. “Servicing customers will be entitled to recover their goods and are welcome to contact the company via the customer hotline (0845-6171490).

“Equally the administrators will be making contact with such customers (including storage customers) once they have finished assessing each individual case to ensure assets are returned to the correct owner.”

Discover had signalled that it was finding the going tough. It said to its shareholders that it had “faced challenging conditions” and that it had been trying to secure additional capital.

However, after failing to secure that extra capital, trading of its shares was suspended and KPMG was appointed as administrator.

Now, it is unclear what will happen to Discover’s 250 employees, who were working across its five northern-England branches. In a statement it said: “The directors and management will be working with the administrators to try and ensure that the business is saved in part or as a whole and as many of its employees as possible maintain their jobs within the business.”

KPMG has said that it is “seeking a sale, which may be part or all of the business”.

UNSOLD STOCK

Discover Leisure’s unsold stock is likely to be sold off to other dealers. But this could create problems for dealers reluctant to take surplus stock or to upset an already fragile motorhome market by selling it off at discount prices.
Randal Thomas, editor of Glass’s said: “It is reported that appreciable numbers of touring caravans and motorhomes will need to be disposed of. However, manufacturers and stock-funders were well aware of the risks of destabilising what is already a weak market. All were at pains to stress that they had no desire to precipitate further market stress through inappropriate disposal policies.”

So while there may be bargains to be had as Discover’s stock is sold off, it is likely the stock will be gradually pushed out through dealers rather than a major ‘dumping’ of stock onto the market.

Discover Leisure first burst onto the motorhome scene in 2005. It swiftly acquired a number of outlets, including the former Brownhills site in Cannock, spending in excess of £30 million.

In 2009, as the recession bit and sales fell, the business entered a Company Voluntary Arrangement (CVA), and closed 11 of its sites.

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04/11/2011 Share this story Share on Facebook icon Share on Twitter icon Share on Pinterest icon Share on Google Plus icon Share on Linked In icon Share via Email icon

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