Liquidation advice for vape shops

There has been a sharp increase in the number of specialist vape shops opening in towns and cities across the UK. However, the recent ban on disposable vapes in the UK threatens to dampen the market. There are also concerns that the market is now saturated, with the rate of vape shop failures starting to creep up. 

If your vape shop is struggling and you’re worried it could go up in smoke, contact our team of licensed Insolvency Practitioners. We can explore the various business rescue options available to you, and if your vape shop is no longer viable, we can provide liquidation advice to help you shut it down in the right way.

Why are vape shops struggling?

The booming vaping market took off quickly, with many independent sellers capitalising on the success of e-cigarettes as a less harmful and more cost-effective tobacco alternative. However, with more and more retailers hitting the high streets, shop owners are having to cut their prices to compete, and those tighter profit margins are causing some shops to close.

The wider economic climate is also challenging. There’s a general downturn on the high street and the cost of living is affecting people’s spending power. Commercial rates and rents are also rising, and the upcoming ban on the sale of disposable vapes, set to be introduced by the end of 2025 at the latest, could further damage retailers’ prospects.  

If these headwinds are causing your business to stutter, help is out there. Seeking professional insolvency advice early on will give you the best chance of saving your business. Alternatively, although it’s a last resort, Company Liquidation could be in your best interests.

Liquidation advice for vape shops

If you cannot pay your vape shop’s bills when they become due, your company is insolvent. At that point, simply continuing to trade and ignoring the situation could lead to accusations of wrongful trading and you could be made personally liable for the company’s debts. If your vape shop has no realistic chance of making a recovery, we can guide you through the process of closing it down via a Creditors’ Voluntary Liquidation (CVL). 

To start the process, you will appoint an Insolvency Practitioner to act as the liquidator. They will take control of the company and value and sell its assets to repay your creditors. Any debts they cannot repay will be written off and your company will be closed down.

No one wants their business to fail, but Liquidation can bring some benefits. You will be free from the endless creditor pressure and worries about the company’s debts. You may also be eligible to claim company director’s redundancy pay. Average payouts are around £10,000, which can give you at least some financial stability.      

Business rescue options for your vape shop

Every business goes through financial downturns, and while your vape shop might be struggling now, there could be steps you can take to get it back on track. For example, you may not be able to access traditional finance, but alternative funding methods could free up the quick cash you need to pay off high-interest debts. You could also ask HMRC for more Time to Pay if you’re struggling to pay a tax bill or negotiate an informal repayment agreement with other creditors.

If you have multiple debts you cannot pay, you could propose a Company Voluntary Arrangement (CVA). It consolidates your debts into a single monthly payment that you make over three to five years. Interest on the debts is frozen and your creditors will not be able to take legal action against you. Alternatively, entering into Company Administration could give you the breathing space to sell off unprofitable assets or restructure the business.

Regain control of your vape shop

Our team of licensed Insolvency Practitioners can provide company rescue and liquidation advice to help you find the right route forward. Contact us today for a free, same-day consultation or arrange a meeting at one of our local offices.