A luxury candle and diffuser maker who supplied the likes of Harrods has gone bust due unpaid business debts. The luxury candles were sold in high-end stores but despite this, the firm has gone bust with debts of more than £1m. This has occurred after cash-strapped consumers fell out of love with candles.
Plymouth based Luxus Home Fragrance Ltd made products sold in John Lewis, Marks and Spencer and London’s Harrods and had five years of success and a turnover of £1.8m in 2021.
But a “perfect storm” of inflation, the cost-of-living crisis and the war in Ukraine hit trade in 2022 leaving bosses facing “disaster” and having to voluntarily wind up the company. The firm has now gone into liquidation with claims from creditors totaling £1,143,262
Reasonable profit in 2021
A spokesperson for Luxus Home Fragrance said the business had a very good 2021 with a £1.8m turnover and made a “reasonable profit”. It was even decided the business needed larger premises and it moved at the end of 2021.
However, 2022 ended up being “a disaster,” the spokesperson said, adding “Last year was super tough, a perfect storm to fail. Moving costs escalated due to increased costs of building materials. Then Russia invaded Ukraine and the demand for luxury candles dwindled.
“The cost-of-living crisis was the final nail, as orders we expected never appeared. Candles are really a luxury good, so when people are struggling, the market falls away.”
Documents filed at Companies House reveal only £32,829 was left in assets, after floating charge holder Capital Commercial Finance was paid £262,515. But this means creditors are likely to be short of £987,310.
Unpaid Business Debts include £351,515 owed to HM Revenue and Customs in unpaid VAT and income tax. The company also faced having to repay a Covid Bounce Back Loan (BBL) of £69,730, from lender Funding Circle, and a Coronavirus Business Interruption Loan Scheme (CBILS) loan, provided by commercial finance company Nucleus, of £111,808.
The £32,060 that is collect-able in assets will be used to pay 32 employees owed £83,060, including pension contributions, as preferential creditors. But another £43,630 owed to workers is unlikely to be forthcoming.
Many Businesses owed money
Among national and local businesses owed cash are Gregory Distribution Ltd, owed £6,898, and Plymstock Security Systems, claiming £1,973. And the landlord of Luxus’ Saltash manufacturing unit, JR Property Partnership,is owed £36,110.
Luxus Home Fragrance was set up by James and Zuzana Debnam in 2015. They incorporated the business the following year and began production in their home with a gas burner in the middle of the lounge melting wax, and pouring candles on a table.
Mr Debnam had worked for Oakleaf Candles, in Suffolk, and had a degree in forestry. He had worked as a saw mill production manager and in the chemical engineering industry in Scotland prior to setting up Luxus.
The business operated as a contract manufacturer of luxury candles, diffusers and room sprays for many high street brands. With orders ranging from 100 candles to 40,000 candles, the company had a wide spectrum of customers, all with different ideas and aspirations.
Early on the business had strong orders from the likes of Neom, which distributes to John Lewis and Marks and Spencer, and Timothy Dunn London, whose products are on sale in Harrods. Its motto was that whatever it manufactured was “made with love, sealed with a kiss”.
In 2017 Luxus worked with Plymouth lifestyle brand and furniture retailer Escapology to develop and launch Escapology’s home fragrance Ember. Mr Debnam said at the time: “The business was set up in 2016 with a core element of our strategy being able to work with new start-up businesses and help them develop an amazing product and get it to market.”
Luxus’ most recent accounts, for the year to the end of 2021, showed it had net assets of £79,493, which were up from £54,347 a year earlier. The company held a meeting of creditors on September 23 and on October 5 appointed liquidators and passed a resolution that the business be wound up voluntarily.
But the team behind Luxus has now started a new business called Happy Scent Co Ltd, incorporated in October 2022. It trades online and is selling its brand Rouge London.
The spokesperson said: “We started selling our own candles, happyscentco.com, as we always felt we made superior candles to a lot of what you can buy on the high street.”
The Happy Scent Co website describes: “Sophisticated and romantic scents, all packaged in a beautiful gift box. The perfect gift for candle lovers that says ‘I’m thinking of you, thank you, I love you’.”
The website said: “Candles really are our passion. We pride ourselves on years of expert craftsmanship and care, to create some of the best candles you will ever experience. Our candles are hand poured with love, and sealed with a kiss.