Farepak

European Home Retail plc (EHR) was a listed UK company, operating in home retail. Though registered in Swindon, Wiltshire, its head office was based in Warmley, Bristol. On 13 October 2006, it was announced EHR and its subsidiary Farepak had gone into administration.

The origins of Farepak Hampers date back to 1935. In 1969, Bob Johnson was appointed managing director of the small Christmas club with 500 agents operating from a butcher's shop in Peckham.

In 1995 Farepak purchased the older Kleeneze Homecare business from Arcadia Group plc, and changed its name to Kleeneze plc, giving off its original business to a subsidiary Farepak Food and Gifts Ltd. By 2006 Kleeneze plc changed its name once more to European Home Retail plc.

After a series of profit warnings starting in June 2006, Farepak ceased trading on 13 October 2006, leaving tens of thousands of people out of pocket for Christmas 2006. EHR itself went into administration later that day. The administrators explained that Farepak's collapse was triggered by the fact £33m it lent to its parent company EHR was not paid back.

It emerged during the Insolvency Service hearing that the money paid to Farepak by shoppers saving for Christmas was largely not held in trust and was generally available for the use of Farepak and its parent company, but held under the security net of HBOS, the group's bank. At various points the directors had tried to place these funds into trust, but the bank refused these proposals. It has also been established that the company was not insolvent at the time its customers paid money to it.

A fund was set up to help families affected by the Farepak closure. Donations have been made by companies including Tesco, BSkyB, Sainsbury's and Marks and Spencer. HBOS also made a donation, raising criticism that it could have given much more help by extending EHR's debt. The fund was officially closed on 29 November 2006. In December 2006, Myleene Klass used eBay to auction off the bikini which she wore during her appearance on TV show I'm a Celebrity... Get Me Out of Here!, raising £7,000 for the Farepak victims.

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