You guys know I don’t normally say “you should absolutely read this Daily Mail story,” but you should absolutely read this Daily Mail story. This story is the most comprehensive explanation of what went wrong with Carole Middleton’s (now failed) business Party Pieces. As we’ve heard in recent weeks, PP was utterly bankrupt when it was sold (without its debt) to James Sinclair for £180,000. We learned that PP had racked up seven-figure debt, more than £2.6 million all together, including pandemic loans, back payments on the commercial property, and stiffing so many vendors. The Mail’s Guy Adams and Calum Muirhead tried to untangle the mysterious web of lies and mismanagement that led to all of this and it’s so fascinating. Some highlights:
The mysterious Middleton finances: The Middleton family finances have always been shrouded in mystery. The Middletons have somehow been able to send their three children to top public schools, while simultaneously building a property portfolio that at various points included a Chelsea flat, plus a £4.7 million Grade II listed Georgian mansion in Berkshire.
The Middletons always acted as if they were rich: Having begun life as a sort of catalogue firm, its business model seemed to be transformed by the internet revolution of the late 1990s, which allowed Party Pieces to become one of the most visible operators in the online field. Its website began selling thousands of different product lines to customers across the country and even expanded overseas. In other words, it looked every inch a huge success. How else, one might ask, could Carole and Michael afford to take family holidays in Mustique? Buy prime land? (In 2005, they paid £295,000 in cash for several acres near their home). Own racehorses? (For a time they had a share of a handy sprinter named Sohraab). And employ somewhere in the region of 30 staff at the converted barn headquarters of Party Pieces in rural Berkshire?
Party Pieces was a private partnership: What no one ever really knew, however, was the exact amount of money the family business was making. Run for years as a privately owned partnership, it never had to file full accounts at Companies House. That made it impossible for anyone to work out how much cash was passing through, or what sort of dividends were being paid to the family. Since profit margins in the online sales business are notoriously slim, a handful of cynics have sometimes wondered if Party Pieces was quite the success story we were being led to believe.
PP’s debt: On Wednesday it emerged that, after 36 years in business, the Middleton family firm has gone under, leaving debts of £2.6million. It’s a development that has left many stunned, not least an army of small suppliers who are now left badly out of pocket. Many had prided themselves on dealing with the Middletons and were perhaps entitled to believe, given their royal connections, that outstanding debts would eventually be taken care of.
Carole Middleton’s betrayal: Take, for example, Sultani Gas, a Kent-based company that supplied Party Pieces with helium for its balloons. It’s currently owed £20,430, according to the administrator’s report. A spokesman said this week that they felt ‘betrayed’ by Mrs Middleton. ‘What hurt me the most was that I trusted her as the mother-in-law of the future King and she just betrayed me,’ the representative said. ‘It is absolutely unacceptable.’ Take also the firm’s landlord, Lord Iliffe, on whose Yattendon estate the company has been based for many years. The estate is out of pocket to the tune of £57,480 and James Hole, the agent for Iliffe, said it now faces ‘severe financial consequences’, adding: ‘They have been long-term tenants. We were astonished about the amount of money owed to others.’
Party Pieces seemingly restructured in 2019: Because Party Pieces is now a limited company (the aforementioned partnership structure was dismantled a few years back), Carole and Michael Middleton have no personal responsibility, legally speaking, to repay any of these debts. That in turn leaves ordinary working Britons on the hook for a business failure presided over by the mother-in-law of the future King.
What happened in 2019: That year also saw them turn the business from a partnership into a private limited company, taking on new directors (and investors). They included Steven Bentwood, a lingerie tycoon whose firm Stirling Group used to supply scanties to Marks & Spencer, and Darryl Eales, a former financier and sports businessman who previously chaired Oxford United FC and owns Wigan Warriors — the most successful club in the history of British rugby league. The corporate change meant it would in future have to file accounts. And the first ones to become public, exactly a year ago, revealed that it had managed to run up annual losses of more than £1 million. Still, the period in question had been heavily affected by the pandemic, which for a time had a dramatic effect on the public’s appetite for (and ability to stage) parties. So there was little indication that Party Pieces — in which Carole and Michael remained majority shareholders — faced any imminent threat.
Carole was still hustling as recently as April: In April, the firm said it was looking to ‘secure additional investment’ to support ‘the next phase’ of its growth plans. And only seven months before it went to the wall, Carole launched Party Pieces in the U.S. and used a cardboard cut-out of herself to promote the move.
Carole’s business partners abandoned her as the company fell deeper into debt: Signs of impending disaster only really began to emerge when Bentwood, who was chief executive of its parent company, resigned on March 23. He was followed out the door a day later by Eales. Behind the scenes, many creditors were by this point desperate.
The debt left behind in Carole’s wake: The aforementioned Sultani Gas had been offering credit to Party Pieces but stopped when the debt had reached £35,000. ‘We started chasing; they were making excuses,’ explained a spokesman, who says he was called by Mrs Middleton on ‘her personal mobile…She apologised. She said that one of the managers was failing to deal with it, so she said, “I’m personally going to deal with it. I’ll rectify everything. I won’t be able to pay it in one lump: I’ll pay it on a weekly basis”.’ Sultani, which had been about to hire a debt collector, took her at her word. ‘Then she said, “I need some more stock”.’ This was sold to her — but not on credit. Some of the weekly repayments were made, the Sultani spokesman said, but others were not. ‘Carole didn’t answer her phone.’ Text messages were also allegedly ignored. Ultimately unable to pay its bills, Party Pieces fell into administration.
Sultani Gas & other businesses are on the hook for thousands: ‘We received a letter from the [administrators],’ added the gas firm. ‘After that [Party Pieces] sent us an email and said, “This is what happened”. They said the business [was going to be] taken over by a new firm – “and you’ll be the first person who’ll get paid”.’ This week the administrators’ report has put paid to any lingering hopes of that. The lost revenue means Sultani’s profit for the year has effectively been wiped out. Other major creditors, according to the report, include Portuguese gas canister maker Amtrol Alfa, which is owed £82,872, and party decorations firm Ginger Ray, due £52,304. Worryingly, the administrators’ report made it clear that it is ‘highly unlikely’ that any of these organisations would receive any of the money that they are owed.
I cannot even imagine accumulating this kind of debt over the course of a handful of years. The company was running at a significant, seven-figure loss as of 2019, which is when Party Pieces restructured from a private partnership to a private limited company, with business partners coming on board to – I would assume – invest heavily in the business, probably with an idea towards expansion into foreign markets (at least that’s what they claimed at the time). While “sources close to Carole” insist that she had stepped away from the daily operations, it’s more than clear that she still operated (mismanaged) PP’s operations and she still had the largest stake in the company. So my question is: was it always a con job? Was Party Pieces ever successful? Did it ever turn much of a profit? Was it always a shell game?
Photos courtesy of Backgrid, Instagram.
