Creditors have been left furious as a party paraphernalia business started by the parents of the Princess of Wales has run into £2.6million of debt.
Party Pieces Holdings, run by Michael and Carole Middleton helped send their three children to £42,930-a-year Marlborough College and enabled them to snap up a manor house for £4.7m.
But at least one businessman is now accusing the Princess of Wales’s mother of ‘betrayal’, amid cries of disbelief about the amount of debt the company has racked up.
The debts are now estimated at £2.6 million, according to details in a report from administrators trying to recover money for the firm’s creditors. This includes £218,749 to RBS bank for a Coronavirus Business Interruption loan, £456,008 to other creditors and £1.4 million in unsecured loans.
It comes as the report makes it brutally clear that it’s ‘highly unlikely’ that any creditors will get anything.
Party Pieces Holdings, run by Michael and Carole Middleton helped send their three children to £42,930-a-year Marlborough College and enabled them to snap up a manor house for £4.7m
Party Pieces Holdings run by Michael and Carole Middleton owes the taxman £612,685
Among those hit is Party Pieces landlord, Lord Iliffe, on whose Berkshire estate the company has been based for many years.
Owed £57,480, the estate now faces what its agent, James Hole, describes as ‘severe financial consequences’.
‘They have been long-term tenants,’ he says. ‘We were astonished about the amount of money owed to others.’
Another creditor, speaking anonymously, said his company engaged in protracted discussions with Party Pieces, but realised it was hopeless.
He added: ‘The amount they owe HMRC dwarfs anything else they owe. That’s why we walked away — [because] of what’s owed to the public purse.’
This, he adds, is not just the £219,000 coronavirus business interruption loan which Party Pieces took out as it was hammered by lockdowns.
‘There is VAT and other things as well,’ alleges the firm’s former trading partner.
The administrators’ report points out that HMRC is owed a total of £613,000 – a claim which must be settled before any of the firm’s small creditors are paid.
Sultani Gas, a company based outside Tonbridge, Kent, which supplied Party Pieces with helium for balloons, is understood to be appalled.
A spokesman said: ‘What hurt me the most was that I trusted her as the mother-in-law of the future king — and she just betrayed me. It is absolutely unacceptable.’
The couple blamed lockdown and the cost of living crisis which caused a sharp downturn in sales and cash flow problems.
The couple blamed lockdown and the cost of living crisis which caused a sharp downturn in sales
The administrators’ report says: ‘Based on current estimates, it is uncertain whether there will be funds available to enable a distribution to preferential creditors. It is unlikely there will be funds available to enable a distribution to unsecured creditors.’
The report details how the pandemic began to cause the company problems saying that revenue contracted from £4.5 million to £3.2 million between 2021 and 2022, with the company making a loss of £900,000.
It said: ‘Management attributed this to the Covid 19 pandemic resulting in reduced social gatherings and a reduction in discretionary spend due to the cost of living crisis. This caused constraints on the company’s cash flows.’
In early 2023 the CEO resigned and the Middletons and other members of the board tried to shore up the company and find a buyer.
But the report said: ‘The company experienced increasing creditor pressure, including threats to present winding up petitions and other legal proceedings.’
In the face of the financial challenges the company approached 175 potential buyers and eventually settled on a deal for £180,000 which was for stock worth £120,000 and £60,000 for intellectual property, computers, contracts and other equipment.
All 12 employees will transfer to the new company, the administrator report said.
The report states that the business began in 1987 when ‘Carole Middleton started to help parents create imaginative parties’
The current company was established in 2019, with Carole as a brand ambassador and she and husband Michael the majority shareholders.
Children’s entertainer turned ice cream entrepreneur James Sinclair runs £30m ‘Partyman’ empire operating soft plays and firm behind teddy-bear making kits
The saviour of the Middleton’s family business is a children’s party entrepreneur from Essex who calls himself the ‘Millionaire Clown’ and says he bases his ‘outrageous’ marketing style on Sir Richard Branson.
James Sinclair started up as a party entertainer aged 15 and now operates a £30million leisure empire that includes an ice cream company, nurseries, soft play centres and a variety of children’s attractions.
The businessman confirmed on Instagram that he has now taken over Party Pieces, which was launched by the Princess of Wales’ parents Carole and Michael Middleton from their kitchen table in 1987.
‘The latest acquisition,’ he wrote over an image of a news article announcing the purchase.
It is not yet clear what price Mr Sinclair paid for Party Pieces or how big the liabilities were that were remaining.
James Sinclair started up as a party entertainer aged 15 and now operates a £30million leisure empire that includes an ice cream company and a variety of children’s attractions
The Rossi ice cream company was snapped up by Mr Sinclair’s Party Man group in 2021
A larger than life character, Mr Sinclair balances the daily management of his main business, Partyman, with a career as a podcaster, vlogger and inspirational speaker.
He’s also written several books, including The Millionaire Clown, which discusses ‘how to make it in business and entrepreneurship’.
His YouTube channel boasts more than 600 videos that spread his business philosophy and give snapshots into his daily routine.
On his personal website, the entrepreneur says he began his children’s party business in his ‘nan’s spare room’ at the age of 15, with the target of earning £40,000 a year and owning a house by the time he was 20.
‘By the time I’d been going for 18 months, and I was 17, I was fully booked every weekend for a year ahead and was turning over £500-£1000 a week,’ he writes.
His Partyman firm now includes nearly a dozen different brands, including Rossi Ice Cream, Marsh Farm, Lee Valley Animal Adventure Park, Twizzletops nurseries and Teddy Tastic – which sells teddy bear making kits.
Mr Sinclair’s business nous will be much needed at Party Pieces, which requires a boost after plunging to a loss following a difficult pandemic.
Mr Sinclair is also an inspirational speaker, lecturing on how to make money
Mr Sinclair is a larger than life character who was once a children’s entertainer
Mr Sinclair’s business nous will be much needed at Party Pieces, which requires a boost after plunging to a loss following a difficult pandemic
Sources said that the sale had been carried out through what is known as a pre-pack administration, meaning that the firm had appointed insolvency practitioners before it was sold without some of its liabilities.
In a 2018 interview, Mr Sinclair named Virgin founder Sir Richard Branson as his role model.
‘I was very influenced by the way he was prepared to be a little bit different and outrageous to get noticed,’ he told growth business.
‘As an entertainer that was a natural fit and I decided that it was what I needed to do too-I needed to stand out from the competition and I soon became well known in my local area for being a character and for offering something different.
‘That helped me to build the Partyman brand and people booked me because they knew the name.’
The entrepreneur said he used social media to boost his profile in the hope of making Partyman ‘the best family entertainment brand in the UK’.
Mr Sinclair calls his marketing style a ‘little bit outrageous’. Pictured is one of his online promotions
Mr Sinclair is seen in this photo enjoying an ice cream with former UKIP leader Nigel Farage
Mr Sinclair’s decision to buy Party Pieces came just seven months after Carole launched her party paraphernalia business in the US and used a cardboard cut-out of herself to promote the move.
Will Wright, head of restructuring at financial advisory firm Interpath and joint administrator, said: ‘Party Pieces is a well-established brand with a proud British heritage, but like many other companies across the retail space, had been impacted profoundly by the effects of the pandemic and the ensuing restrictions on social gatherings.
‘We’re pleased to have been able to conclude this transaction which sees the business acquired by James Sinclair. We wish him all the very best for the future.’
The Middletons had wanted to sell Party Pieces with a dowry and avoid insolvency, but this proved impossible, insiders told Sky News.
Interpath Advisory was reportedly appointed as administrator in court this morning.
Friends revealed in April that Carole, 68, and Michael, 73, are planning to step away from the firm to spend more time with their grandchildren
The sale of Party Pieces comes just 12 days after King Charles’s Coronation, where Carole and Michael were among the close family in attendance.
The business has also been selling a range of Coronation-themed items on its website.
These include Coronation Flag Bunting (£4.99 for three metres), which features the side profile of the King in gold on a Union Jack background, a set of Great British Party hats and flags (£5) and Union Jack paper plates (£4.99 for eight).
The Middletons owned just over half the company while two investors owner the rest. They have appointed Interpath as strategic advisers.
In April a Party Pieces spokesman commented on news of Interpath’s involvement: ‘We are working with our advisers to secure additional investment which will help support the business as we look to embark on the next phase of our growth plan.’