‘I’m not reinventing disaster’ - Boss of St Ives firm Cream Club claims administration will lead to success
- Credit: Archant
Last month, The Hunts Post told how a St Ives company had entered administration owing creditors £1m. MARK SHIELDS speaks to managing director Craig Cook about why he thinks the new company will succeed.
Craig Cook is a man who knows about branding.
Inside the St Ives offices of Cream Club Ltd, he sits in a meeting room bearing the name The Dream Factory above the door, and removes his monogrammed Cream Club blazer.
To one side of him is a mini-bar labelled Champagne Corner, to the other an illuminated display of Cream Club’s assorted clients, and on the table in front of him is a plate of biscuits - Club biscuits, naturally.
Cream Club Ltd is Mr Cook’s third attempt to make a success of his web marketing company for estate agents, and the one that will succeed, he says, admitting to mistakes in the past.
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But it has already had to make redundancies, he admitted, cutting staff from nearly 60 three months ago, to “just under 50” today – a reflection, Mr Cook says, of his refusal to gamble on secur-ing new sales this time around.
Job losses have come from senior management, sales, and production, but the company has invested in new staff in client-facing roles.
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“It’s not like I’m reinventing disaster again,” he says. “This is a brand new business model, that sits on the software that we’d only just finished building. It might be called Cream Club, but it’s different.”
The dozens of current employees of Cream Club Ltd, and staff of the two previous companies of which Mr Cook was a director certainly hope so. Many previous employees say they have been left out of pocket, considering it unfair the brand keeps reinventing itself.
In 2011, insolvency experts were called in over debts totalling £725,000 at Cream Worldwide, where Mr Cook was managing director, eventually striking a deal to repay creditors around one-third of the amount. It was wound up in 2014.
Then in May this year Cabec Ltd, trading as The Cream Club and of which Mr Cook was director and majority shareholder, went into administration with debts of more than £1m, including £150,000 in unpaid wages to staff. On the same day, it was bought in a £50,000 pre-pack deal by Cream Club Ltd, again with Mr Cook as director.
Speaking at the offices of Cream Club Ltd, Mr Cook says he has few fears history will repeat itself, claiming greater profit margins have been made possible by moving almost all business online.
“The journey of coming along this model has steeped me in experience that makes me the right man today,” he said.
“But it’s learning through mistakes, so you don’t arrive with a brand new business model that’s unique to the marketplace and know all the answers. You just don’t.”
The software the company relies upon – offering a range of personalised websites for buyers and sellers – was “a five-year build”, and one which was completed under Cabec.
But he insists: “It was never the intention for the last company not to survive. Never, ever. That’s a fact.”
He blames that failure on the company’s online opponents, including those running anti-Cream blog sites, which an administrator’s report said had a hand in new business drying up.
Mr Cook says he has been threatened himself – “scandalous stuff about threats to my life and this, that and the other” – and fears the negative attention could put his new business at risk.
Administrators said employees at Cabec Ltd were not paid in November or December last year. Many have told of having to resort to borrowing money or selling possessions to make ends meet, unable to afford to leave without claiming their money.
While offering his sympathy to them, Mr Cook claimed he and fellow director Claire Olphert had made sacrifices too, averaging £15,000 a year in wages between them while living with her parents, and ensuring lower-paid staff were paid first.
“I understand why I’ve sacrificed, for the wins further ahead,” he says. “Of course, that’s why every entrepreneur starts, you want to row your own boat, and you’ve got an idea.”
Despite that, after seven years, there are no DB9s in the driveway, he says, and no home for his four children. “I can’t explain to you how much that hurts, not paying your staff. It’s not something I ever would want anybody else to go through, or go through [myself] again,” he says.
Staff at the new Cream Club are happy and motivated, he says, and “paid in full, on time, every time”. Former staff have had to apply to the government for reimbursement at the taxpayer’s expense.
In the final months of Cabec, Mr Cook was in regular contact with insolvency experts for advice, before eventually deciding to put it in administration when a loan of £145,000 was called in.
He is reluctant to elaborate on his own management style, but says others have appraised him as “target-driven and an inspiring motivator”, and admits a flair for sales.
He claims existing creditors will be paid back from the profits of Cream Club Ltd - a result he would be “absolutely delighted” with.
“We’ve reinvented ourselves, yes, but with a much more profitable model,” he says.
Mr Cook’s monogrammed blazer, now on the back of his chair, is embroidered not only with the Cream Club logo - founded 2010 - but the company motto, inspired by a Disney film Mr Cook watched with his son, stitched in Latin.
It reads Custodiant Incedendo: ‘Keep Moving Forward’.
Were you an employee or supplier of Cabec Ltd? Email email@example.com