In 2018 award-winning entrepreneur Carley Jones appeared to have it all.
The self-confessed fitness fanatic had hit on a winning formula with her gym-themed fast food brand – Kettlebell Kitchen.
The Geordie launched the business in Ancoats, Manchester, in 2016 and in its first year it was turning over more than £1.5m and making a profit of £200,000.
Health conscious customers loved the concept of junk food alternatives like protein pizza, clean kebabs and build-your-own-boxes.
Three more stores followed, turnover peaked at £3.5m, the workforce grew to 110 and Jones was named North West Woman of the Year in the Rising Star category at an awards ceremony run by Barclays. Kettlebell Kitchen had a multi-million-pound valuation.
Then a few short months later the company had gone into liquidation.
Insolvency practitioners Fortis were called in due to a number of their outlets becoming unprofitable after having financial difficulties.
Everyone was shocked at the liquidation. Jones was in her hometown of Newcastle opening up a separate franchise site when the news broke.
“It felt like my heart had been ripped out,” Jones told BusinessCloud. “I reinvested everything I made into Kettlebell Kitchen and I was left with nothing except for £300,000 personal guarantee loans.”
Today Kettlebell Kitchen’s original base in Ancoats is still very much open – except Jones isn’t involved.
So how did Jones lose control of a business she founded played a pivotal part in its growth?
The key players are Jones and her investors Gary Nixon and Jamie Alaise. Nixon is a serial investor and has just invested £1m in a money-saving app called Use, as well as being involved in Manchester-based brand and web agency AHOY.
More about them later. First we need to go back to 2016 when Jones hit upon the business idea of providing healthy food with a gym theme.
“I was leaving the gym at 8pm and struggling to find suitable things to eat afterwards,” said the former call centre owner.
“There are a lot of people like me who are health conscious but time poor and I wanted to create an alternative to KFC and McDonalds – and so Kettlebell Kitchen was born.”
Her business plan was built on providing healthy, locally-sourced food free of unnecessary additives and preservatives. All meats were unprocessed and the sauces homemade.
“The name was crucial because I wanted it to be really quirky,” she said. “People had to look it and think ‘that’s gym food’. Kettlebell Kitchen was perfect.”
The combination resonated with customers, who were willing to pay a bit more for healthier food with meals costing from £6.
“As soon as we opened at Ancoats we were busy on day one,” she said. “We were doing £3,000 a day, serving 400 people a day.”
Jones came across fellow entrepreneur Alaise, who has six directorships including Salford-based Tanko Sports. He invested a six-figure sum in the business in exchange for 30 per cent equity.
The duo opened a second site in First Street but the higher rents and lower-than-expected footfall meant it was a decision they would regret.
At about the same time Jones diversified into making meal plans and took on a third 8,000 sq ft site in Ordsall Lane, where they prepared up to 6,000 meals a week.
In 2018 Kettlebell Kitchen bought health food supplier Soulmate Food out of administration.
Jones opened a fourth site in Salford but quickly realised that each outlet was effectively taking customers away from the other three – which caused financial pressure on the business.
Jones admits she was naïve at times but says her biggest regret was taking investment from Nixon.
A quick check at Companies House reveals 39-year-old Nixon is a serial entrepreneur with nine active directorships, including Manchester-based The PPI Team.
She says he invested £400,000 through a business called Hive Circle, which became the biggest creditor at the date of liquidation with a total of £553k being owed.
The deal saw Jones decrease her shareholding to 46 per cent with Alaise reducing his stake in the business. Described as a “silent investor” Nixon brought in his own finance director called Colin Holliday, from The PPI Team.
“If I’m being honest I took my eye off the financial side of the business because we had a FD,” concedes Jones. “I was left to focus on the business. I knew we were having financial challenges but had no idea of how bad they were until the receivers were brought in.”
In the immediate aftermath Jones helped out for a fortnight speaking to staff and suppliers.
On January 17, 2019 Nixon became the director of three newly created companies KBK Meal Prep; KBK Stores; and KBK Holdings, all with the same correspondence address of The Glades, Festival Way, Festival Park, Stoke On Trent, Staffordshire. Alaise was appointed a fellow director on January 25.
On January 24 Paul Newman, head of commercial operations at Knutsford-based FoodWell, emailed Nixon, Alaise and Jones expressing an interest in buying Kettlebell Kitchen and its assets.
Fortis Insolvency were appointed and Kettlebell Kitchen Ltd and Kettlebell Kitchen Services Limited were placed into creditors’ voluntary liquidation on 6 February 2019.
A spokesman for Fortis said: “Following liquidation various proposals were received for Kettlebell’s assets and a sale was agreed acting in reliance upon professional valuation advice. Offers received for the assets were treated as confidential.”
According to Alaise’s LinkedIn account he also became the CEO of Manchester-based Soulmate Food in February 2019. He told BusinessCloud he didn’t want to enter a ‘debate’ around Kettlebell Kitchen but confirmed he was no longer involved in the business and his focus was on Soulmate Food.
At the time of the liquidation Kettlebell issued a lengthy statement, praising Jones’ ‘passion’ but admitting the company had “exhausted all available options” for funding.
Jones still has her franchise in Newcastle but remains heartbroken at the turn of events. “In less than six months I went from having a multi-million business to having nothing,” she told BusinessCloud.
“And yet Kettlebell Kitchen continues to trade from the same Ancoats address that I launched it from.”
A statement on behalf of Kettlebell Kitchen said: “We can confirm that Kettlebell Kitchen Ltd and Kettlebell Kitchen Services Ltd were put into liquidation by director Carley Jones on 6 February 2019. Companies House shows an estimated deficiency owed to creditors of £1,126,676.43 for Kettlebell Kitchen Ltd and £399,562.30 for Kettlebell Kitchen Services Ltd along with many members of staff not being paid for a full month’s wage.
“Carley Jones continues to operate Kettlebell Kitchen NE Ltd as a completely separate entity and has been instructed by ourselves to rename her business by 1 May 2019. The company was purchased from the liquidators by the new owners on 14 February 2019.
“The new owners are both Manchester born and bred and have a real passion for rescuing what was and is a strong Manchester-based brand with a focus on protecting the future of the Manchester-based employees.
“The new owners have already invested the cash injection required to ensure stability and job security for current employees with further investment of circa £500,000 planned for the growth of the business with a view to employing an additional 50 Manchester-based jobs over the coming months.
“The new owners wish to thank and publicly declare their appreciation to the existing team members who have remained during the turbulent last couple of months.
“Our flagship Ancoats store is fully open and ready to serve the great people of Manchester along with our Salford-based headquarters providing nationwide meal prep plans delivered to your door.”
It’s thought the new owners are Nixon and FD Colin Holliday but Kettlebell Kitchen didn’t add to their earlier statement when contacted.
Jones took to LinkedIn to announce her ‘BIG NEWS’ that she’s sadly no longer with the Kettlebell Kitchen brand but she’ll be returning with a new brand and concept very quickly.
- Chris Maguire is the editor of BusinessCloud [email protected]