EXCLUSIVE by STEVEN DOWNES
National news: the closure of a Croydon bakery chain this week was covered widely, without many reporting Ranganathan’s loss of £400,000 in shares
- Romesh Ranganathan stands to lose up to £400,000
- Staff were only informed of business’s closure by text message
- Since 2023, directors transferred £5.7m property assets to another company while £2.9m was also taken out of the business
For all the outpouring of public sympathy over the closure of a long-established Croydon business, as Coughlan’s shut the doors on their bakers’ shops for a final time on Tuesday night, the public records for the company tell a story of a business that, according to their own accountants as recently as last September, could have continued to operate as a going concern “for at least 12 months”.
The decision to close Coughlan’s was announced by director Sean Coughlan via social media on Tuesday night. Key is that Coughlan’s is a voluntary liquidation, a choice made by Coughlan and fellow directors, including his sister, company secretary Virginia Coughlan, and Jacqueline Taylor.
All three are also co-directors of another company, Smitham Lodge Estates Ltd.
Coughlan’s, with its bakery in Thornton Heath, where the company was founded in 1937, has undergone significant and rapid expansion since the troubled years of covid, opening 12 new stores, and becoming a chain of 31 across south London, Surrey and Sussex, with 175 employees.
In the past couple of years, behind the scenes, Coughlan’s were busy seeking new investors, and conducting a bit of their own corporate engineering.
Emotional announcement: Sean Coughlan breaking the news about the closure. Staff were advised by text
In his emotionally fraught statement this week, Sean Coughlan blamed business rates, employers’ National Insurance contributions, fuel price hikes caused by the war on Iran, the recent heatwaves… indeed almost anything other than his own management of the business. Or businesses.
Some staff at Coughlan’s shops have been in touch with Inside Croydon to say that their bosses never advised them in advance of the closure, and that they only found out on Wednesday morning, via a text message.
“It would have been nice to hear Sean say sorry to all his staff,” said one.
“Unfortunately, we all woke up to no jobs and to be told by text.”
All of the reasons given by Sean Coughlan for the decision to close the business are no doubt valid – according to Coughlan, the company’s fuel bills have doubled in recent weeks. But as he said himself, as recently as March this year, business at the bakery had been very good. They’d been making a lot of bread.
There’s no suggestion of wrong-doing in the corporate changes, but the fuller picture as contained within Coughlan’s accounts suggest that the assumed victimhood of the directors is misplaced.
Coughlan’s own auditors said in the annual report last September, “We have not identified any material uncertainties relating to events or conditions that individually or collectively may cast significant doubt on the company’s ability to continue as a going concern for a period of at least 12 months.” The increase in employers’ National Insurance contributions had been announced in November 2024, so would have been factored into the accountants’ and management’s planning for some while.
Coughlan’s Bakeries Ltd’s latest annual accounts, for 2024-2025, were published by Companies House in February this year. They were agreed and signed off by the company directors.
Coughlan’s Bakeries had been losing money most years, even before covid.
Those latest annual accounts for the year to September 2025 showed turnover for Coughlan’s Bakeries Ltd had risen to £6.8million, while losses reduced from £229,600 in 2024 to £98,800.
Which is why the decisions taken in the boardroom over the past three years or so might give a clue to the way the directors have wanted to take their business. One thing seems clear: the directors won’t be going short of bread.
Where’s the money gone?: between 2023 and 2024, £2.87m in tangible assets was taken off Coughlan’s books. The directors deny that this money was paid in dividends
Smitham Lodge Estates Ltd was registered with Companies House in February 2023.
Since 2023, £5.7million-worth of property assets have been transferred from Coughlan’s Bakeries Ltd to Smitham Lodge.
An “investment property” owned by Coughlan’s Bakeries Ltd, valued at £400,000 in 2023, was also transferred to Smitham Lodge in 2024.
In 2023, the Coughlan’s Bakeries Ltd balance sheet also showed £3,476,436 as “tangible assets”. In 2024, that figure had been reduced to £607,929 – a reduction of £2,868,507.
According to an accountancy expert, that has the look of dividends being drawn down for shareholders, the directors. Coughlan’s, in a statement to this website, deny that the directors took any dividends, though they failed to explain what happened to the £2.87million.
It was in the autumn of 2024 that Coughlan’s brought on board a celebrity investor, comedian Romesh Raganathan, who professed his love for the bakers’ vegan dough.
Happy days: TV sleb Romesh Raganathan, here with Sean Coughlan, promoted the bakery after he bought £400,000-worth of shares in the company
The bakers quite liked the comic’s dough, too, as in two transactions, each of around £200,000, they sold to Ranganathan (through his production company, Vetty Ltd) enough shares to make him “a person of significant control” of the company.
Ranganathan has not responded to Inside Croydon’s request for comment.
He has been reported as saying he is “gutted” at the closure of Coughlan’s. He is probably a little bit upset, too, to discover his £400,000-worth of Coughlan’s shares have been rendered virtually worthless by his friend’s decision to seek voluntary liquidation. Romesh’s mum probably isn’t very happy about it, either.
Inside Croydon spoke to Sean Coughlan this week.
In our telephone interview, the businessman said that all the kind comments about his now closed company was no consolation to him.
We asked him about Smitham Lodge Estates Ltd. “I can’t talk about that,” Coughlan said.
We asked about the £2.87million taken out of the company in 2024, and the transfer of £5.7million property assets from Coughlan’s to Smitham Lodge. “That’s not what happened,” he said.
“But these transactions are shown in your Companies House records, in your company accounts. The accounts which you signed off,” we said to Coughlan.
He hung up.
Juggling act: the Smitham Lodge Estates balance sheet shows the transfer of Coughlan’s Bakeries property assets
In a statement issued to Inside Croydon from Virginia Coughlan, she claimed that there are “a number of inaccuracies and misunderstandings in your interpretation of the published accounts”, without actually stating what these might be, nor offering any alternative explanation for the £2.87million that vanished from their balance sheet.
“The separation of the property assets from the trading business was not something undertaken in anticipation of the current circumstances,” Virginia Coughlan wrote.
Closing up shop: one of the Coughlan’s baker shops, in Coulsdon, on Wednesday morning
“We first sought specialist advice on this in 2018 when exploring investment opportunities for the business. We were advised that potential investors were interested in the trading company but not in acquiring property assets, and that a demerger would make the business more attractive for investment.
“HMRC clearance for the proposed demerger was obtained in 2018, although the transaction was not completed until late 2023.
“Following the demerger, we entered into discussions with a prospective investor. After a lengthy process, we concluded that they were not the right long-term partner for the business.
“We were subsequently delighted when Romesh Ranganathan expressed an interest in investing, as we believed that represented a much better strategic fit.” Bet Romesh’s mum will be so proud that her son has finally become a “strategic fit”.
“Absolutely no dividends passed to the shareholders from Coughlan’s Bakery Ltd. Throughout this period the directors have continued to discharge their statutory duties and, prior to the current insolvency process, creditors and HMRC were paid as they fell due.
“We appreciate that the published accounts form part of the public record, but we do not accept the conclusions you have drawn from them.” In fact, no conclusions have been drawn. Questions have been asked of Coughlan’s in respect of their accounts, but no answers have been forthcoming.
“As the company is now entering a formal insolvency process, we do not intend to comment further on matters that will properly fall within the remit of the appointed liquidator.”
As previously noted: Coughlan’s Bakeries Ltd’s is a voluntary liquidation.
- Click here to see the latest annual accounts for Coughlan’s Bakeries Ltd (to Sep 2025)
- Click here to see the 2024-2025 accounts and financial statement for Smitham Lodge Estates Ltd
Read more: Croydon bakers firm Coughlan’s closes blaming Labour NI hike
*This report was updated on July 3 to correct the relationship between Sean and Virginia Coughlan to that of siblings. We apologise for any misunderstanding.
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The usual business model employed these days. Capitalism without any Capital. Once you see assets transferring out of a business for no particular reason you should know it is the same old grift underway. Romesh your financial advisor is the weakest link. You should say goodbye.
You can’t keep blaming the government for business failures, this has been abused to death, imho, a responsible business owner needs to adapt or die . Coughlans was in decline more than decade ago yet decided to open more shops and jacked up their prices to zone 1 levels. They knew this ages ago and took the cold blooded decision to transfer assets ages back. Whoever advised them is very savvy.
Mayor Perry’s Carlton Plastics Ltd also has zilch money left in the bank and is basically fucked pretty soon. His letter to Starmer today was his backup excuse for what is to come….a ,” see i told you so ” to the next pm is due.
This must of been hard for IC because they support small businesses in Croydon. But as soon as i knew about the very controlled and intentional liquidation i was kinda mad because a lot of honest hard working ppls jobs were at stake.
Everything in this article is spot on. I don’t understand why Sean and his family moved assets to Smitham then next year he was begging people on his socials for investment through Coughlan’s Ltd. Romesh subsequently went in and his £400k is history.
Thanks for Inside Croydon for publishing this. A lot want to scapegoat Rachel Reeve abd note sycophantic Mayor Perrys letter to the government concerning Coughlans today to make himself look good but with Inside Croydon we got the truth as numbers do not lie.
The directors seem to have provided a quite detailed explanation as to what happened to the company assets.
There are essentially two businesses here – one based on the property assets and the other based upon the operation of a bakery. It makes sense to separate these businesses into different entities, so that potential investors know exactly what they’re investing in – either a bakery, or a property business. The movement of assets looks to me like a fairly standard demerger.
Following the demerger, the bakery business looked for investors to try and make that business profitable.
All accounts need to have a ‘going concern’ statement within them which will have considered the issues known at the time (increase in NI minimum wage etc) but not others that were unknown at the time (as nobody predicted a fuel crisis due to Trump’s reckless actions in Iran). So again, nothing unusual there.
The property assets could still be profitable, even if the bakery operations are not. Again it makes sense to separate these businesses to allow a profitable property business to continue, even if an unprofitable bakery business cannot.
So, it looks like perfectly reasonable corporate governance to me. It’s extremely sad that the bakery side of business folded with many people out of a job. This was due to many factors, but it is unarguable that the government’s tax, minimum wage and business rates policies tipped them over the edge.
Yes, Richard, a “standard business practice” which saw around 170 people who had a job on Tuesday out of work on Wednesday.
It’s “standard business practice” of venture capitalists. PubCos do it all the time now, because there’s more money to be made as property developers rather than in running pubs or selling beer.
Smitham Lodge Estates Ltd now own the bakery at Thornton Heath, so that won’t be included in the voluntary liquidation. Coughlan’s Bakeries Ltd had been paying rent for the bakery to Smitham Lodge since the asset was transferred between the companies. Perhaps Smitham Lodge will rent out the bakery again, to a different tenant for its intended purpose. Who knows?
Because none of that, or any of the other business transfers, were ever mentioned by Sean Coughlan in his little video on Tuesday.
And sometimes these ingenious accountancy practices allow the rent of a property leased to an associated company to be at an inflated price so that one makes loads of money at the expense of the other, then oops one goes bust!
I learnt to read acccounts after my builder supposedly went bankrupt . That builder has repeated the same process 3 times over 10 years . It is a perfectally legal yet immoral and cowardly way of wiping creditors and starting afresh. I wish no one go through this experience
The fact that Sean slammed the phone down on IC when asked a genuine question seems odd. Just doesn’t seem like what the nice cheerful guy on TikTok as he portrays would do. Fair play to him anyway, his accountants are well ahead of the game. I think cash can also be classified as “tangible assets” and his accountants have done the accounts vaguely and legally enough for Sean and his sister to have a sweet retirement whist the others scramble to find new jobs.
You could have just replied “tough sh*t, suckers!” and been done with it. It’s not like we don’t know.
The closure of Coughlan’s is very sad news. I always appreciated their quality products and felt good that I could support an independent local company. My sympathy goes out to all those employees who lost their jobs at such short notice. I am also sad for Romesh Ranganathan who, as well as being an amusing comedian and good actor, also appears to be a thoroughly decent guy.
Given that the property assets have been moved out of the business, I assume that there is little hope for the business to be resurrected 🙁
There might be a possibility of the business being resurrected, albeit in a different form. The separation of the property assets might actually make that more likely.
If there is still demand for Coughlans products, then they could be made and then sold through other retailers. The business could change from being vertically integrated (from production to retail), to being simply a business to business supplier to other retailers.
Without the overheads of the shops this makes the bakery operations (as a BtB supplier) much more attractive to potential investor.
This is why local news reporting is so vital. To read the right wing nationals you would think that Rachel Reeves had personally closed the bakeries.
Regardless of their accounts, their stores looked like they were from the 1980s (and not in a good way), the product selection was more pastries than a real bakery (and very average at best) and there was no sit down opportunities. But they charged Gails prices for Gregs quality and product choice.
Outdated business, that did not survive because no one wants to shop there, especially younger generations. Many would rather queue for an hour at Julian’s than waste money at Coughlans.
Spot on, Glen. I always felt they were a time capsule from the 80s and wondered how they had survived so long. One is reminded of Miss Marple at Bertram’s hotel where a business that didn’t change with times turned out to not be changing because being a hotel was not actually it’s primary purpose …. Not that I’m implying they’re a criminal front like the fictional Bertram’s Hotel but perhaps there is some bigger picture we are not seeing. That they didn’t change because that wasn’t what anybody wanted. As Miss Marple observed, we don’t always like change but if things don’t change that’s unnatural. And so “I learned … that one can never go back, that one should not ever try to go back – that the essence of life is going forward”