The manufacturing arm of doughnut specialist Project D is expected to enter administration with redundancies confirmed across the business’ bakery and office teams.
The move from the Derby-based brand comes just over two months after it agreed to a Company Voluntary Arrangement (CVA) with its creditors over debts totalling more than £286k.
Project D had claimed at the time that its core wholesale business was “as strong as ever”, continuing to operate its 11,000 sq ft factory in Spondon which has capacity to produce up to 17 million doughnuts per year.
Despite implementing several cost reduction measures within its site over the past few months, the company struggled to cope with soaring input costs and a drop in sales, leading to it file a notice of intention to appoint law firm Ward Hadaway as administrators on 28 August.
“We can confirm that we have taken steps to enter administration for one of our group’s manufacturing businesses, Bugibba Independent Limited,” commented Project D marketing manager Max Poynton, noting that the decision was part of a broader strategic plan. “We are committed to protecting the interests of our creditors and working through this process responsibly,” he added.
Details clarifying the structure of the whole company behind the brand were not provided.
Poyton said Bugibba Independent Limited had faced significant challenges over the last 12 months, including a record increase in minimum wage, rising raw material costs, and a recent spike in chocolate prices. In addition, its revenue had declined by 20%, which he said was due to the ongoing cost of living crisis.
“Regrettably, we have had to make a number of redundancies across both the bakery and office teams. We are working closely with those affected to support them in finding new employment opportunities,” said Poynton, without confirming the exact number of jobs being lost.
Project D was co-founded in 2018 by a trio of school friends including Poynton, Jacob Watts and Matt Bond. It achieved rapid growth, boosted by a strong social media presence with videos going viral on Tiktok, and was named Online Bakery Business of the Year at the 2022 Baking Industry Awards.
Last year, it surpassed its £400k crowdfunding target by almost a third as it looked to supercharge growth through retail expansion, product innovation, digital marketing, e-commerce, and new hires. However, it was subsequently forced to close three of its four newly-opened outlets in the aftermath of a loss-making quarter, and more recently was ordered to pay out over £31k to a former worker in an employment tribunal.
Nevertheless, Project D has maintained a steady NPD pipeline and even secured a new supply deal earlier this month with theme park and tourist attraction operator Merlin Entertainments Group.
No comments yet