Page last updated at 13:06 GMT, Monday, 4 August 2008 14:06 UK

Q&A: Wrapit unravels

wedding cake
Wrapit has about 100 staff and showrooms around the UK

Wedding present firm Wrapit has ceased trading leaving hundreds of couples fearing they will never see their presents.

Administrator KPMG has been called in and will now "look under the bonnet" of the business to see whether it can sell it and recover presents and money for customers.

But the omens for people who have bought presents through Wrapit's website are not good - main creditor HSBC is owed 3.5m.

So, here is what happens now and what you can do if you are one of the unlucky couples.

What does administration mean?

The business is in trouble, so much so that it has ceased trading. Jane Moriarty and Myles Halley, of KPMG, have been called in as administrators.

They will try to find a buyer for the business and have a good look at the numbers, the list of customers and how many assets the business has.

If no buyer is found, then these assets will be sold off and people owed money might get some back.

How did it get into trouble?

The administrators have already said that the business has been in trouble for some time.

It handles around 2,500 to 3,500 wedding lists a year, but failed to make any money at all in the last six years.

Its bank HSBC is owed 3.5m and it was talking to the business and advisers last week to try to find a rescue package.

When these efforts broke down, the business went into administration.

I'm still waiting for wedding gifts, will I see them?

The administrators are going through the warehouse trying to match up the stock with the intended recipients.

So if your presents are in the warehouse, then give it a bit of time and you should receive them.

If the items were ordered and never made it to the warehouse, then things are looking a lot more gloomy.

How gloomy?

Well, if no buyer is found, then the assets are sold off and the money used to pay those who are owed.

But there is a priority list. First in line is HSBC which has ring-fenced 1m in the last few weeks with the business in trouble.

Customers are further down the list, known as unsecured creditors, alongside the business's 100 staff and suppliers.

The administrators said Wrapit is "not asset-rich" - it has some stock in the warehouse, a customer database and some computer software.

That means customers whose items were on order are highly unlikely to see them or get any money back.

Wedding guests have spent a lot? Is there anything they can do?

Wrapit says around 2,000 couples and possibly 100,000 guests are involved.

The first thing they should do it ring the call centre set up for enquiries - the number is 0844 7701301.

At first the number did not work, but the problem was rectified. That said, it is likely to be busy for some time.

Customers should formally register as a creditor, by writing to KPMG, outlining details of the gift, where it was bought, and whether they want the item or the money back.

This should be done by recorded delivery or proof of postage should be kept with a copy of the letter.

Guests who have paid by credit card have another route to follow.

Apacs, the UK's payments association, said that customers who had paid over 100 on a credit card are covered and should get in touch with their card provider.

Those who had used a debit card or spent less than 100 on a credit card were not automatically covered, Apacs said, but some card issuers would look at their claims on a case by case basis.

What are Wrapit saying?

Wrapit was co-founded by former fashion journalist Pepita Diamand in 2000 to allow couples to compile their lists, with guests able to buy items online through the website.

It wanted to take on big names such as John Lewis and Debenhams with a huge database of gifts to choose from.

As well as its central warehouse in Acton, west London, the firm has two London showrooms and others in Aberdeen, Beaconsfield, Belfast, Birmingham, Bristol, Canterbury, Darlington, Glasgow, Harrogate, Manchester, Newbury, Newcastle and Norwich.

The business is blaming HSBC for withholding credit and debit card income, saying this caused a cash crisis.

A spokesman for the bank said: "HSBC refutes any suggestion that HSBC was responsible for the company's failure. HSBC believes it has done all it can over recent months to assist the directors."

What are customers saying?

Customers have understandably been very upset, whether they are couples waiting for their gifts or guests having bought them.

Couples now face the embarrassment of asking guests to claim on their credit cards, and the disappointment of missing out on presents.

One new bride, Ciara Barr, said they were expecting 700 of presents, although they had been told that the majority are in the warehouse.

She said that it looked as though Wrapit was just trying to shift the blame onto the bank.

And the administrator?

It says a sale must be made soon, if it is going to happen.

It is asking any potential buyers of the business, or any of its sites, to call KPMG on 020 7311 4821.


SEE ALSO
Wedding gift firm ceases trading
04 Aug 08 |  Business
Tied up in knots on a wedding day
11 Jun 08 |  Business

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