At the coal face: dealing with receivership on the shop floor

How do you manage a business when it’s gone into receivership, with customers hearing a fresh batch of rumours every day? Elaine Murphy and Regan Hutchins at Dublin’s Winding Stair have been through the process

THE ANNOUNCEMENT that the Thomas Read group had gone into examinership in December 2008 was for many an introduction to a word that soon entered common parlance in the months that followed. At the time, few fully understood what examinership meant, including those in charge of the businesses that were directly affected.

“It was a complete shock,” says Elaine Murphy, who was general manager of the Winding Stair restaurant at the time, which was still turning a profit. “This was at the very beginning of the recession, so there weren’t any other companies in examinership, and we didn’t know what it was.” It meant an examiner was being appointed to the troubled company to shepherd it through a recovery process and assist in decisions regarding management, lenders, creditors, suppliers and staff.

For Murphy, continuing to run the business under such conditions was challenging. “You can imagine trying to run a restaurant as busy as the Winding Stair, with suppliers going crazy and customers reading that we were in examinership, people cancelling their bookings and suppliers ringing me all day, every day, small little fishmongers or small charcuterie makers, saying ‘Thomas Read owes me thousands of euros for the Winding Stair, this will literally destroy our business’.”

Downstairs in the bookshop, business was also still booming. “It was Christmas, so it was busy, and Christmas was even better than the years before,” says Regan Hutchins, manager of the Winding Stair bookshop. Yet all the time, reports of the group’s financial difficulties were being played out in the national media, with the name Winding Stair at the fore.

“Thomas Read’s had run out of money, and none of us knew, because the accounts were all dealt with in a central office,” says Hutchins. “I was very embarrassed, because I felt as if I had run a business into the ground.” At the end of the examinership of about three months, there were a nail-biting few days in court before the company went into receivership. Again, the news came as a surprise to those it most keenly affected.

“We would hear almost everything on the news,” says Murphy. “Somebody rang and said ‘I heard you’ve gone into receivership’, and I hadn’t heard it.” Receivership here was initiated by the group’s biggest creditor, ACC Bank, with the receiver’s main role to recover money owing to that creditor.

For Murphy, receivership meant bad news for the small suppliers that she had spent so long reassuring and working to keep on board, many of whom she says were paid back a small fraction of what they were owed. For Hutchins, it meant getting rid of the lifeblood of the bookshop: the books.

“In June I was told to return half of the stock. There was some outstanding payment issue with a wholesaler,” he recalls. “So one bleak day in June I was bagging all of the books, putting them into boxes.” Unfortunately for Hutchins, the depopulation of the bookshop coincided with a visit from Canadian short-story writer Alice Munro. “Alice Munro came into the bookshop and we were taking shelves down. She just walked out, embarrassed.”

To add insult to injury, the Winding Stair bookshop spent much of the busy summer season without the kind of books most constantly in demand, due to the edict not to deal with their original, local supplier. “All summer we had no James Joyce, no Oscar Wilde, no Yeats. We were losing so much custom.”

Although the bookshop finally got a new UK-based supplier, the process of replenishing was slowed down considerably. “From the time that you put an order in to the time the books arrived, if they did arrive, you’d be looking at a month. So there was no question of getting new titles or getting customer requests, which was a very big part of our operation.”

Upstairs in the restaurant, Murphy was making an effort to keep their small, artisan suppliers informed, insofar as far as she could, to ensure they continued to trade with the Winding Stair. “I kept in touch, I called them, tried to keep them on board and give them as much business as possible,” she says. “A lot of the very big people were paid, as some people are called preferred creditors. Banks and the revenue are top of the agenda . . . So the big guys ended up losing the least.”

Given that the Winding Stair had been built on the ethos of using small, locally sourced suppliers where possible, Murphy took pains to to try and ensure they weren’t left out in the cold. Staff were also being informed by customers that the restaurant was closing down imminently, or that receivership meant liquidation, none of which helped morale.

ONCE THE WINDING Stair was put up for sale, it made things even more complicated. “It gave people the license to come walking in,” says Murphy. “A lot of people would throw around comments that they had put in an offer, that they would do this, that or the other.” For Murphy, who had invested so much personal time and vision into creating the restaurant, it was heartbreaking to hear it being audibly belittled. “It was so upsetting. The entire ghastly receivership was really stressful.”

By Christmas, things still hadn’t changed and Hutchins proceeded with his stock list early in November to ensure he had enough books to sell in the busy Christmas season. “I put my order through on November 15th, it was all approved, but the books didn’t arrive until December 21st,” he recalls, a delay he says was caused by the late payment of bills. “I was just begging people to come back, saying ‘I’ll have all of this stock in a few days.’ That was the lowest point. I was showing customers pictures on Amazon.com of stuff that would be in. It was mortifying.”

With the new year came the possibility of a new owner – Brian Montague was a regular client of the Winding Stair, a former CEO of A&L Goodbody, and has also worked with Guinness and as a general manager at British Airways.

For both Murphy and Hutchins, his arrival as a potential buyer and his eagerness to include them both in his plans for the business brought hope that the restaurant and bookshop could flourish as they’d envisioned. When the sale went through on April 26th, with Murphy becoming joint proprietor with Montague of the Winding Stair restaurant and bookshop, and of the nearby Pravda bar, it finally brought an end to a painful and protracted process.

“Interactions can only be described by comparing it to the way that the world felt going from Bush to Obama,” is how Hutchins describes the change in ownership. Within hours of the deal being signed, books were going back on the shelves. “You could also open the newspapers, read the reviews, look at things like the Dublin Writers’ Festival that’s coming up, and feel, I can be part of this again.”