Barclays loses £26m on Benjys exposure

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The Independent Online

The sandwich bar chain Benjys collapsed into administration yesterday, wiping out most of the £25.9m it owes to Barclays, and was then snapped up by a venture capitalist for a nominal sum. Hamilton Bradshaw, a specialist private equity investor, is taking on the entire chain with its 100-strong fleet of vans and does not expect to shut any of its 70 high street stores. It is going to inject an unspecified amount of capital in the company to develop the van business.

Benjys had ambitious expansion plans but was mired in ballooning losses and lawsuits from disgruntled former franchisees. It suffered a cash crunch when it tried to transform itself by going more upmarket and launching a fleet of "vanchises" - vans that sold sandwiches and hot drinks to office workers.

Deloitte was appointed as administrators of Benjys yesterday and sold the business and its assets, including the Benjys name, to Hamilton Bradshaw. Benjys' previous backers were Barclays and ECI Ventures, the venture capitalist that backed chief executive Ian Rickwood and his wife Emma, the marketing director, in a buyout of the business in 2000. Hamilton Bradshaw will assume part of Benjys' debts to Barclays, but the majority was wiped out in the deal. Majority investor ECI is losing several millions of pounds of equity, though it had already written down the value of its stake.

The business suffered a fatal blow when it emerged last month that 33 former franchisees who operated "Benjys delivered" vans would sue the company, alleging the vans failed to work properly and that the business model was flawed. However, the disgruntled franchisees' lawsuits fall away now Benjys has plunged into administration and changed hands.