Aromantic enters administration after post-pandemic sales decline

Aromantic Limited, a Scottish supplier of natural and organic cosmetic ingredients, entered administration on 23 September after declining sales, rising costs and the burden of short-term borrowing left the nearly 30-year-old business insolvent.

Christopher Horner and Kevin Pinkerton of Business Rescue Expert were appointed joint administrators. All 11 employees were made redundant immediately before the appointment, and the business has ceased trading.

Based in Forres, Scotland, Aromantic supplied oils, fragrances and other ingredients used to make creams, lotions, balms, toiletries and spa products. The company sold through its own website and online marketplaces including Amazon and Shopify, serving customers ranging from home crafters to salon owners and beauty therapists.

The family-owned business was founded in 1997 by Kolbjorn Borseth, who later handed control to his son, Benjamin Borseth. The company generated annual turnover of approximately £1.1 million.

Aromantic performed strongly during the Covid-19 pandemic, but sales subsequently declined as the business faced higher raw material, shipping and employment costs, according to the joint administrators. The company turned to short-term borrowing to support its operations, but repayments placed additional pressure on cash flow.

The company approached Business Rescue Expert during the summer to explore its options. The restructuring firm worked with Aromantic's director on potential routes to preserve the business, including a going-concern sale, but those efforts did not produce a viable solution before the administration.

Following their appointment, the administrators secured a sale of Aromantic's assets to an unrelated buyer. The transaction includes the company's remaining stock, websites and online platforms. No details of the purchaser or consideration have been disclosed.

Pinkerton said the combination of falling revenue and rising operating costs had pushed the company into insolvency, while the repayment requirements attached to its short-term loans further weakened liquidity.

The administration brings an end to Aromantic's operations after almost three decades, although the sale of its digital assets and stock provides a route for elements of the business to continue under new ownership.