Staff at SOS Wholesale staff have undertaken legal proceedings against the wholesaler after it made the majority of the 100 employees redundant and entered the administration process on September 8th.
Pearson Solicitors and Financial Advisers are now working with concerned employees to review the redundancy process and assess whether the legal requirements for consultation were met.
SOS Wholesale faced multiple challenges in recent months including rising input costs and changing consumer spending habits. With cashflow and profitability under pressure, the company was unable to meet its financial obligations, leading directors to place the business into administration.
Read more: SOS Wholesale enters administration
The company’s turnover fell from £49 m in 2022–23 to £42 m in 2023–24, while gross profit declined from £6 m to £4.6 m over the same period. Operating profit also dropped, from £1.5 m to £806,554.
This pay award, which is separate from awards granted for redundancy pay, notice pay and arrears of pay, is often unknown to employees and many who are affected by redundancy miss out on potential compensation as a result. If successful staff may be able to claim a protective award, which is compensation of up to 90 days’ gross pay.
Scathing report from previous MD
Retired founder and MD of SOS, Mark Beckett, who sold the company three years ago, recently wrote a scathing Linkedin post about the situation: “For months, the signs were there: late payments to suppliers, customers complaining about unfulfilled orders, sales teams left with little to sell. Last week SOS entered administration, and with it our legacy was destroyed.”
“The events of the last few days raise further questions — CCTV hard drives wiped, cables pulled, an unusual amount of shredded paper, scanning guns missing . Relationships that took decades to build are gone overnight, as key staff are now at TSDC. What hurts most is not just the collapse of a profitable business but how it has been handled — the broken promises, the hollow pledges, the lack of accountability,” he added.
