James Middleton has sold his ailing greeting card business for £300,000 just months after it ran out of cash.
Kate Middleton’s brother, 34, put Boomf, which sold personalised marshmallow and greeting cards, into administration in December.
But now the company has been bought by British-Estonian businessman Stepan Galaev, 35, as part of his recently established company called Otkrytka Limited.
The administrators report said: ‘The company had exhausted it’s available cash resources and its cash constraints were impacting on its ability to continue trading and no further funding was available from the company’s shareholders or third parties.’
James Middleton has sold his ailing greeting card business for £300,000 just months after it ran out of cash. Kate Middleton’s brother, 34, put Boomf, which sold personalised marshmallow and greeting cards, into administration in December
It’s not clear why the businessman has bought into the failing company. He has not taken on the debts which means some creditor will be left out of pocket.
Boomf’s investors include James Matthews, the billionaire husband of James’ sister Pippa, greetings card company Moonpig founder Nick Jenkins and former VoucherCodes supremo Duncan Jennings.
Stepan manages portfolios for angel investors including Nick Jenkins.
Boomf owes almost £800,000 to creditors including £146,305.88 to HMRC, but has assets of £561,054, meaning there is a shortfall of £236,310.88.
The biggest creditor is Forward Partners Venture Advance Limited, who ploughed £350,000 into Boomf.
The ailing company has been bought by Estonian businessman Stepan Galaev, 35, as part of his recently established company called Otkrytka Limited
Others include £60,053 owed to a company called MNC, based in the City of London, CBRE Limited owed £26,899 and Facebook, owed £55,892.
The report said: ‘The company has not granted security to any creditor and therefore there are no secured creditors in this matter.’
Boomf, which sold personalised birthday cards and chocolates and had been trading since 2013.
Accounts for 2020 published in the report show it sold goods worth £9.1 million, but the cost of sales and other expenses meant that it made a loss of almost £700,000.
Boomf owes almost £800,000 to creditors including £146,305.88 to HMRC, but has assets of £561,054, meaning there is a shortfall of £236,310.88.
The report said 28 companies showed an interest in buying the firm but Otkrytka Limited, which was only set up in November, offered the most and also paid immediately.
James and his advisors have also negotiated that they will get 2 per cent of the company revenue for the next 12 months plus 5p from every sale from a returning customer over the same period.
Administrators said that turnover was expected to be £1.5 million in 2022 and there would be an estimated 400,000 repeat customers, which would be worth £20,000.
Stepan is a graduate of Cranfield School of Management with an MBA according to his LinkedIn profile.
Boomf’s investors include James Matthews, the billionaire husband of James’ sister Pippa, greetings card company Moonpig founder Nick Jenkins and former VoucherCodes supremo Duncan Jennings. Pippa, James and James are pictured together in 2019 at Lady Gabriella Windsor’s wedding
He describes himself as an Angel Investor and non-executive director of a number of companies and says he speaks Russian and Estonian as well as English#
His company Galaev & Co, a management consultancy had reserves of £160,000, accounts for the year to April 2020 show.
James also runs Ella & Co, a health and wellbeing company for dogs .
The entrepreneur has six dogs – Golden Retriever Mabel and four black Spaniels called Ella, Zulu, Inka and Luna plus puppy Nala.
He has often credited his dogs with helping him through his struggle with depression.
James has previously described himself an ‘ideas’ man who struggled ‘with the minutiae of running a business’.
He dropped out of Edinburgh University to focus on business ventures, starting the Cake Kit Company in 2007. That was dissolved in 2015. In 2011, he registered three more companies, Nice Cakes, Nice Wine and Nice Group London.
His parents, Michael and Carole, started their own mail-order business, Party Pieces, in 1987, and it became highly successful. Mrs Middleton said recently that she had no plans to slow down.