Wholegood has parted ways with CEO Martin Sandler, with founder Carl Saxton-Pizzie retaking the reins as the specialist wholesaler looks to cut costs amid an ongoing turnaround.
The business also slashed about 10% of its 160-strong workforce this month as part of the move to reduce its operational footprint and ease cashflow constraints.
Saxton-Pizzie, who appointed Sandler as boss in 2022 while stepping back into the role of chief growth officer, told The Grocer that Wholegood would “strategically focus” on expanding its core fresh organic produce business and distribution services operation. The smaller branded wholesale part of the group is expected to be less of a priority.
The Grocer understands Wholegood has fallen behind on its invoices due to the ongoing liquidity squeeze and is contacting suppliers to work out a repayment schedule.
Newly filed accounts at Companies House showed a material uncertainty remained over the company’s ability to continue as a going concern given ongoing losses and the amount owing to creditors outweighing the opposite side of the ledger.
Revenues jumped another 19% to £35.6m in the year ended 31 March 2023, with the business improving its cost base and operating margin. It helped pre-tax losses reduce from £1.8m to £1.2m.
“I am thrilled to resume leadership of Wholegood,” Saxton-Pizzie said. “The turnaround right now is challenging but it’s going to put us on the right path to continue supplying organic fresh produce and distribution services to our broad customer base.
“Martin really helped us to level up our operational capabilities and I am personally grateful for his guidance and input, which makes it possible for us to move forward with great efficiency and effectiveness.”
He added the cost-saving initiatives in place would play “a pivotal role” in bolstering the group’s financial position.
As well as reducing headcount, Wholegood is also consolidating its warehouse footprint to slash overheads and optimise costs further.
The group scaled up rapidly during the pandemic – with pre-Covid revenues standing at £14m – as it won significant new business with q-commerce operators, taking on more space, staff and listing more than 1,000 additional brands. It also subsequently signed an agreement to supply Milk & More in early 2023.
But the moves increased the cost base and stretched working capital, leading to Wholegood seeking external investment for the first time in its history.
Investment fund Metamorphosis Investments acquired a minority stake in the business in September last year – which the new accounts showed led to a £2m injection.
Accounts also revealed the company negotiated a six-month standstill with banking partners and a waiver of covenants running until February 2024.
The Grocer understands the business is currently in advanced talks with lenders to strengthen its liquidity position.
“The directors believe they will be able to manage the cashflows and generate required funds to allow the business to continue for the foreseeable future,” the directors’ report in the accounts added.
Saxton-Pizzie started Wholegood from the back of a van in 2007, going on to bootstrap the business and winning contracts to supply organic fruit & veg and specialist brands to the likes of Ocado, Whole Foods Market, Planet Organic and Gail’s.
The business won the Specialist Wholesaler of the Year prize at the Grocer Gold Awards twice, in 2019 and 2021.
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