Nabarro is advising on the administration of Lowcosttravelgroup as the travel agency business left thousands of holiday makers at risk of losing their summer getaways.
With the school holidays barely underway, customers of lowcostholidays.com and its partner travel sites may lose hotel rooms and flights that had not been paid for as the group ceased trading on 15 July.
Joint administrators Smith & Williamson and CMB Partners UK are being advised by Nabarro, with a team led by restructuring partner Glen Flannery and assisted by employment partner Tracy Marsden.
A statement from the administrators blamed uncertainty prior to the referendum and the more expensive Euro for the demise of the group, as well as the effect of terror threats on destinations such as Paris, Brussels, Egypt, Turkey and Tunisia.
Flannery (pictured) said: ‘The full effects of Brexit have yet to play out, but less than one month since the outcome, it is being cited as a contributing factor in some business failures, particularly in sectors sensitive to discretionary consumer spending and currency fluctuations. Travel is one of those sectors in which there may be more distress.’
Lowcosttravelgroup has a 500-strong workforce, with 120 at the company’s UK headquarters in Gatwick, and annual transaction values of around £500m. As many as 110,000 customers are currently booked to travel on holidays through the group.
The company, which also has offices in Spain, Switzerland and Poland, said the collapse followed ‘exhaustive attempts by the group’s directors to rescue the group, which were hampered by the recent and ongoing turbulent financial environment’.
The Nabarro restructuring team has led on several major administrations. Flannery advised foreign exchange broker LQD Markets in 2015 and on the second restructuring of UK Coal in 2013, which preserved 2,000 coal industry jobs.
In April this year, Weil Gotshal & Manges advised British department giant BHS on its administration, with DLA Piper working on behalf of administrators Duff & Phelps.