100 redundancies at collapsed UK pharmacy in administration

Jhoots fell into administration at the end of December with significant debts owed to creditors and the bank as well as disgruntled staff.

In Abingdon’s Bury Street, the remaining staff staged a walk-out when they failed to be kept up to date by head office having been 10 weeks without a pharmacist and a manager, they claimed.

They left a notice on the door having quit in August explaining to customers that they struggled to cope without the support.

And now a report by the administrators suggests more than 100 employees at Jhoots that were made redundant could be owed money.

Staff have staged a walk out and quit Jhoots in Abingdon (Image: Matt Simpson)

Staff were identified as potentially being owed money after redundancies or departures before administration.

Administrators are helping them pursue claims through the Redundancy Payments Service, the administrators said.

Yet the administrators do not expect there to be enough funds to pay preferential or unsecured creditors.

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Joint administrators Ian Corfield and Rajnesh Mittal of FRP Advisory said the business and assets were sold to Allied Pharmacies for £4.5m immediately after the company entered administration.

The sale included £3m paid upfront for goodwill and £1.5m deferred, which was received on June 30.

Staff have staged a walk out and quit Jhoots in Abingdon (Image: Matt Simpson)

But this won’t cover all the debts racked up by Jhoots Pharmacy Limited.

Allied Pharmacies also agreed to pay £150,000 for three purported freehold properties, but administrators later found Jhoots only had legal title to one of them in Ilfracombe, north Devon.

HSBC is not expected to reclaim its £15.7m it lent to the group and is expected to suffer a substantial loss.

The report says there is unlikely to be any money for HMRC, preferential creditors or ordinary unsecured creditors.

Investigations into the Jhoots’ affairs, assets and possible claims against directors or others remain ongoing, the report said.

It added that administrators do not expect there to be funds for unsecured creditors, including trade creditors and related companies.

Listed unsecured claims total roughly £4.75 million in the administrators’ report.

Jhoots’ director Sarbjit Singh Jhooty previously highlighted that 2024 was expected to be “challenging” for the business.

He said the pharmacy market is “heavily regulated therefore the risk of competitive pressure is low” and added that at the time he did not foresee any “significant effect” in the future.

Trade union, the Pharmacy Defence Association, estimated that more than £870,000 in unpaid locum fees was owed by Jhoots businesses to its members.

Before the Allied takeover, there were about 150 Jhoots pharmacies across the UK.

A spokesman for the buyer previously said it was “focused on bringing these pharmacies back to full operational capacity as quickly as possible”.