Lakesmere Group’s collapse sent shockwaves through the industry this week in another hammer blow for the sector.
This was the UK’s largest building envelope specialist, according to CN’s annual Specialists Index, and the biggest industry clients from Crossrail to Network Rail were scrambling to ensure projects didn’t suffer this week.
Group subsidiary McMullen Facades and its overseas subsidiaries in the Middle East and Asia were not placed in administration and rumours were swirling about potential buyers for McMullen.
Why did this happen?
As seems so normal these days, problem projects were attributed as the principal factor behind the group’s demise. You only need to look at the ongoing woes at Interserve and Carillion to know there is something rotten with contracting at present.
For every problem job led by a tier one contractor, there are multiple specialist firms affected. And Lakesmere is understood to have had to replace work on UK jobs at its own expense.
CN has been contacted by several companies and individuals connected to Lakesmere who have said they have no idea what is happening and when, or indeed if, they are likely to be paid for work already carried out.
Companies have already alleged they have lost retentions, meaning they will be doubly punished on top of lost earnings and work by the group entering administration, through no fault of their own.
Lakesmere Group collapses: In-depth
Lakesmere was continuing to talk up its UK contracts and international presence via its website until the week before the shock announcement.
Since then more than 100 people have lost their jobs and CN understands the mood was one of complete surprise when the news was delivered to staff.
The management at Lakesmere will have to come up with answers for their actions in the lead-up to this announcement as creditors vent their anger.
It is a sad sign of the times that another company has gone to the wall, with more suppliers and staff left out of pocket.