North East fair trade pioneer Traidcraft has collapsed into administration having faced a number of cost pressures and the impact of strikes.
The Gateshead-based organisation, which began in the 1980s and is owned by nearly 5,000 shareholders, announced the move "with tremendous sadness", saying the impact of energy and transport cost rises, the war in Ukraine and December's Royal Mail Strikes had stymied its recovery from the pandemic. Administrators from Begbies Traynor were appointed to the firm in what bosses say was "only honourable course of action" to minimise impact on suppliers and creditors.
It follows a number of vulnerable years for Traidcraft, which employs about 40 people and had faced collapse in 2018 following a fall in the value of the pound on the back of the Brexit vote. At the time, the business split in two with its charitable arm - Transform Trade - forming a separate organisation which bosses said was unaffected by the administration.
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In accounts to the end of March 2022, which show turnover of £5.3m and operating losses of £255,614, Traidcraft said the departure of CEO Robin Roth - in post since 2016 - following a period of absence, had caused difficulties. A tougher economic market had also forced the business to review its pricing and the range of stock it held in response to a challenging market post-pandemic.
The loss-making firm also said it had largely stopped trading in foreign currency and was sourcing its products from UK-based organisations. In the documents published last September, Traidcraft acknowledged its viability was uncertain.
A recent statement from Traidcraft's board of directors read: "It is heartbreaking to bring the Traidcraft plc story to an end in this manner but we can at least take some consolation from the knowledge that we have been a major force for good in the ethical retail sector for over forty years. We have championed the cause of trade justice to the point where we now have better standards and procedures in place to protect the rights and dignity of growers and producers all over the world.
"We would like to offer our heartfelt thanks to all those who have journeyed with us as employees, board members, shareholders and suppliers. We would particularly like to thank our loyal band of 'Fairtraders', many of whom have been with us since the very beginning. The mission to combat trade injustice and poverty is far from complete."
Transform Trade CEO Charlotte Timson vowed to build on Traidcraft's work to date. In a statement, she said: "Our mission it to transform trade so that everybody benefits. As we continue this work, our focus right now is on two things.
"Supporting producers: over the years, Traidcraft did incredible work with smaller producer groups - helping them find a route to market where no one else could. We're working on plans to expand our work supporting small groups of artisans and farmers, like those Traidcraft was originally set up to help, in order to fill the gap they leave behind.
"The system: trading ethically within a system that is unjust is always going to be difficult - especially during a cost of living crisis. From the start, the odds were stacked against Traidcraft. Our campaigning and advocacy work aims to level the playing field by demanding change to the entire trading system. We've shown in the past that it can be done, but we must press on with renewed energy."
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