European Home Retail plc (EHR) was a listed UK company, operating in home retail. Though registered in Swindon,

Wiltshire Wiltshire (; abbreviated Wilts) is a historic and ceremonial county in South West England with an area of . It is landlocked and borders the counties of Dorset to the southwest, Somerset to the west, Hampshire to the southeast, Gloucestershire ...

, its head office was based in

Warmley Warmley is a village in South Gloucestershire, England. Warmley is situated in between Bristol and Bath. It is a parish, with its own church, and has some minor landmarks, such as a World War One memorial the focus of Remembrance Services, and ...

Bristol Bristol () is a city, ceremonial county and unitary authority in England. Situated on the River Avon, it is bordered by the ceremonial counties of Gloucestershire to the north and Somerset to the south. Bristol is the most populous city in ...

. On 13 October 2006, it was announced EHR and its subsidiary Farepak had gone into

administration Administration may refer to: Management of organizations * Management, the act of directing people towards accomplishing a goal ** Administrative Assistant, traditionally known as a Secretary, or also known as an administrative officer, admini ...

.Bleak Christmas for hamper firm
BBC News, 2 January 2007

History

The origins of Farepak Hampers date back to 1935. In 1969, Bob Johnson was appointed managing director of the small

Christmas club A Christmas club is a special-purpose savings account, first offered by various banks and credit unions in the United States beginning in early 20th century, including the Great Depression, under which bank customers deposit a set amount of money ...

with 500 agents operating from a

butcher A butcher is a person who may slaughter animals, dress their flesh, sell their meat, or participate within any combination of these three tasks. They may prepare standard cuts of meat and poultry for sale in retail or wholesale food establishm ...

's shop in Peckham. In 1995 Farepak purchased the older Kleeneze Homecare business from Arcadia Group plc, and changed its name to ''Kleeneze plc'', giving off its original business to a subsidiary ''Farepak Food and Gifts Ltd''. By 2006 ''Kleeneze plc'' changed its name once more to ''European Home Retail plc''.

Farepak collapse

After a series of profit warnings starting in June 2006, Farepak ceased trading on 13 October 2006, leaving tens of thousands of people out of pocket for Christmas 2006. EHR itself went into

later that day. The administrators explained that Farepak's collapse was triggered by the fact £33m it lent to its parent company EHR was not paid back. It emerged during the Insolvency Service hearing that the money paid to Farepak by shoppers saving for Christmas was largely not held in trust and was generally available for the use of Farepak and its parent company, but held under the security net of HBOS, the group's bank. At various points the directors had tried to place these funds into trust, but the bank refused these proposals. It has also been established that the company was not insolvent at the time its customers paid money to it. A fund was set up to help families affected by the Farepak closure. Donations have been made by companies including

Tesco Tesco plc () is a British multinational groceries and general merchandise retailer headquartered in Welwyn Garden City, England. In 2011 it was the third-largest retailer in the world measured by gross revenues and the ninth-largest in th ...

, BSkyB,

Sainsbury's J Sainsbury plc, trading as Sainsbury's, is the second largest chain of supermarkets in the United Kingdom, with a 14.6% share of UK supermarket sales. Founded in 1869 by John James Sainsbury with a shop in Drury Lane, London, the company ...

and Marks and Spencer.

HBOS HBOS plc was a banking and insurance company in the United Kingdom, a wholly owned subsidiary of the Lloyds Banking Group, having been taken over in January 2009. It was the holding company for Bank of Scotland plc, which operated the Ba ...

also made a donation, raising criticism that it could have given much more help by extending EHR's debt. The fund was officially closed on 29 November 2006. In December 2006,

Myleene Klass Myleene Angela Klass (born 6 April 1978) is a British musician, singer, presenter, model and businesswoman. She was a member of the pop group Hear'Say, and later released two solo classical crossover albums in 2003 and 2007. More recently, Klass ...

used

eBay eBay Inc. ( ) is an American multinational e-commerce company based in San Jose, California, that facilitates consumer-to-consumer and business-to-consumer sales through its website. eBay was founded by Pierre Omidyar in 1995 and became ...

to auction off the

bikini A bikini is a two-piece swimsuit primarily worn by women that features two triangles of fabric on top that cover the breasts, and two triangles of fabric on the bottom: the front covering the pelvis but exposing the navel, and the back coverin ...

which she wore during her appearance on TV show '' I'm a Celebrity... Get Me Out of Here!'', raising £7,000 for the Farepak victims. As a knock-on effect

Amtrak The National Railroad Passenger Corporation, doing business as Amtrak () , is the national passenger railroad company of the United States. It operates inter-city rail service in 46 of the 48 contiguous U.S. States and nine cities in Canada ...

, the group's main delivery agent, went into administration early in 2007. Farepak moved from administration to liquidation on 4 October 2007. The Insolvency Service brought disqualification proceedings against Farepak's directors. Two of the directors, Joanne Ponting and Stephen Hicks, gave undertakings to the Insolvency Service to settle the claims. The remaining directors defended them. In June 2012 the disqualification proceedings were withdrawn by the Insolvency Service after it emerged that "not only did the directors do nothing wrong, they made genuine strenuous efforts to save the group and the depositors" and the cause of the losses to Farepak's customers was the behaviour of its bank, HBOS. Mr Justice Peter Smith, the trial judge, made a statement after the case collapsed in order to explain the reasons. Ponting and Hicks are to be released from their undertakings. The trial judge also criticised the Secretary of State for its unfair approach towards the directors and witnesses.

Board of directors

*Chairman: Sir Clive Thompson (formerly of Rentokil) * William Rollason - Chief Executive Officer (CEO) *Stevan Fowler - Finance Director and Company Secretary (appointed 1 January 2006) *Nicholas Gilodi-Johnson - Non-Executive Director *Neil Gillis - Independent Non-executive Director *Paul Munn - Independent Non-executive Director *Michael Johns - Independent Non-executive Director appointed 28 September 2005) Nicholas Gilodi-Johnson was appointed after the death of his father Bob Johnson.

Subsidiary companies

EHR was the parent company for a number of well-known subsidiary companies, namely:

Kleeneze Europe

Kleeneze was sold on 13 October 2006 to Findel plc.

eeZee TV

In March 2005, EHR formed the joint venture satellite TV station "eeZee TV", a 50/50 joint venture with

JML Direct JML Direct TV is a generic name for a series of British shopping channels broadcasting on the Sky, Freesat and Freeview platforms, owned by JML Direct Limited. JML Direct TV originally launched on Sky channel 664, on 1 October 2002 as JML Di ...

, broadcasting on Sky digital channel 657.

Farepak Food & Gifts Limited

Farepak had been operating since 1981 at a site in Swindon,

. Its own annual turnover of £70m (2004), was mainly generated from its core business in

Christmas hamper A hamper refers to one of several related basket-like items. In primarily British usage, it refers to a wicker basket, usually large, that is used for the transport of items, often food. In North America, the term generally refers to a household ...

s. In addition, Farepak sold High Street (and other) gift vouchers and also supplied gifts, including electricals. Unlike many of the other subsidiary companies, Farepak was not sold to the Findel group. There was a five-hour protest outside the company's gates on 17 October 2006.

I Want One Of Those.com

Gifts and gadgets website. Now sold to the Findel group.

Kitbag.com

Europe’s largest online sports retailer. Now sold to the Findel group.

Stock market

European Home Retail plc was listed on the stock exchange under ticker code EHR.L. 2005 group turnover was £176.2m.

References

External links

General

Kleeneze company website

Farepak Website

Direct Selling Association

Farepak Hampers
Carmarthenshire County Council
How Farepak Stole Christmas
Unfairpak Forum
Western Daily Press - Fair Play for the Farepak Families
Western Daily Press Farepak Christmas Appeal

News

BBC

Farepak families fund is launched
BBC News, 7 November 2006
Factsheets: Trading Standards info on Farepak
BBC Oxford, 17 October 2006
New bid to help Farepak families
BBC News, 19 October 2006
MPs call for FTSE Farepak pledge
BBC News, 23 November 2006
Farepak response fund due to shut
BBC News, 29 November 2006
Hampers for some Farepak victims
BBC News, 7 December 2006

Swindon Advertiser

Farepak Fiasco special section
contains numerous articles
Farepak victims' plight is taken up by Government
Swindon Advertister, 20 October 2006
We'll keep up the pressure on Farepak
Swindon Advertister, 23 October 2006
Top level probe ordered into Farepak fiasco
Swindon Advertister, 25 October 2006
Farepak boss: 'I am so sorry'
Swindon Advertister, 12 November 2006
Please play Santa to Farepak customers
Swindon Advertister, 23 November 2006
TV documentary shows Farepak families still want answers
Swindon Advertister, 5 December 2006

Other

The Observer, 5 November 2006 {{Multi-level marketing Defunct multi-level marketing companies British companies established in 1935 Retail companies established in 1935 Retail companies disestablished in 2006 Defunct retail companies of the United Kingdom