Businessman says he is throwing in the towel on official advice
By JOHN ROBERTSON
THE GAME is finally up for bargain retailer Chris Hodge after his epic battle to stay afloat. Mounting legal and financial problems are forcing him to shut his doors in about four weeks.
He has said similar things several times before yet continued to trade but yesterday he told The Shetland Times that this time it was for real.
The controversial former millionaire’s fate was sealed at a crucial meeting he had with advisers in Edinburgh this week which dashed his hopes of hanging on for the busy Christmas shopping period. The session involved an insolvency practitioner, Mr Hodge’s lawyers and his accountants and he said he was advised to start removing his goods and shut down his shop in the former Judane knitwear factory by around the middle of November.
He said yesterday: “I’m horrified by the timescale they have planned it on. I was planning to trade to Christmas or thereabouts and then try and move out in the quieter season.”
Pressed about whether he really meant it, he said: “This is definitely going to happen. I’ve got to follow the advice I’m given. At this point I don’t really have any more choice.”
Mr Hodge has long been frank and open about his company’s struggle this year to avoid bankruptcy, as well as about his acrimonious dispute with the Miller family, who own Judane. The latest round in that feud unfolded this week when, according to Mr Hodge, Caroline Miller tried to stop him selling fireworks, as he has done at this time of year for the past three years.
He said the reason given was that there would be no insurance cover for the building. The SIC trading standards division and the fire service visited on Wednesday while Mr Hodge was away. He said yesterday that despite Mrs Miller’s efforts he had been given the all-clear and sales had started.
Assistant divisional officer Duncan MacDougall of the fire service in Shetland said yesterday: “As far as I was concerned, I was quite happy with the storage of fireworks in the shop and in a container.”
Asked about her actions, Mrs Miller said yesterday the issue had not been about fireworks but concerned a letter from the building’s insurers warning that cover would be removed from today because of a series of risks inside and outside listed by a surveyor, including mess, pallets propped up against a wall, gas cylinders, a limited number of fire extinguishers, unsafe overhead lights and no sprinkler system. She instigated action through the health and safety authorities to have the problems sorted out by Mr Hodge. The insurance company has since extended its cover until the 31st October for improvements to be done.
She said: “I wasn’t trying to get him to stop selling anything. As long as the firemaster was happy with the safety and security of the building, fine. We can’t have a building that is not insured or not insurable.”
The Millers are in the process of trying to evict Mr Hodge for non-payment of their £5,000-a-month rent since he stopped paying after February. The latest round in the legal bid took place in the civil court in Lerwick last week. Mr Hodge said that as far as he knew it had been thrown out while errors by the Millers are corrected. But he added: “They’re going to hound me out one way or another.”
Mrs Miller said the case would return to court in December. She revealed that Judane also has six small court actions for £5,000 each against Mr Hodge for rent and costs. When told about Mr Hodge having to close before then, she said: “Personally I feel very sad that he hasn’t been able to make a go of his business in Shetland. I’m sad to see any business fail. However, if you don’t pay your landlord that’s very bad business practice.”
As well as seeing his fortune swallowed up by his retail business, Mr Hodge said he faces the likelihood of personal bankruptcy and losing his home in Largs. “It’s a pretty glum outlook at the moment,” he said, with even the best scenario likely to leave him with nothing. “Absolutely everything has been invested in this place and everything was borrowed against it to invest in here.”
The shop is a far cry from what it was three years ago when around 30 workers beavered away handling a stream of customers arriving from all over Shetland. Just three workers remain on his books with one, Clive Ratter, who has been there from the start, due to leave at the end of the month.
Mr Hodge said he did not actually wish to carry on trading much longer, having lost his enthusiasm for his life in retailing as a result of the troubles faced in Shetland. He fancies staying on in the islands and doing something new. “I really don’t know what I’m going to do. I’ll get into December and I won’t have a job, basically.”
The rent dispute arose after the deal to buy the disused factory from the Millers fell through at the last minute and they imposed a rental of £5,000 a month, which Mr Hodge described as “extortionate”. After paying it until March he made the “fair offer” of £3,500 instead, which is around what he said he would have paid for a mortgage to buy the building over a 12 year period. The offer was rejected and no rent has been paid since then.
The cost of taking on the SIC in a failed bid to get £1m damages for wrongly being refused planning permission and then falling foul of the Millers’ rent demands has completely destroyed Mr Hodge’s Scottish property company, he said, forcing him to sell off chunks to fund the warehouse and legal battles. He said his remaining tenants might now lose their flats so he can sell them to pay the bank.
He said the bank will get its money if he goes under because his retail business debts are secured against assets. He has been able to pay off a lot of the debt to his suppliers, unlike many other local companies that have gone to the wall in recent years. His debt has fallen from £0.5m to just under £10,000, he claimed. “I’m not going to go out and leave a whole trail of people behind me who are owed money. If I have a chance to trade again I want people to go back to knowing they’ve not been stitched up or badly dealt with.”
Looking back, he said he was better off back where he started in St Clement’s Hall before the council pushed him out at the behest of neighbours and rival shopkeepers. “It was being put to some use and it was earning money,” he said. “It’s just derelict now.”
Judane still owes most of a £335,000 loan plus interest to Shetland Development Trust from an investment made in 2003 to expand its knitwear operation. The company gave up operating the vast factory in February 2005.