COVID has left a “well respected” and well-known leisure company struggling, the boss of a Poole-based firm has said. 

H20 Sports in Salterns Road, off Sandbanks Road was a “strong and stable” business before the pandemic hit, director Matt Ely said. 

During the pandemic, when holidays abroad were not allowed, many people came to the south coast as a so-called staycation that saw sales in leisure boom. 

Matt, whose business sells water sports equipment, said: “Leisure businesses grew quite considerably over that 18-month period that Covid was in place because people weren't travelling, they were spending well on leisure goods. 

H20 Sports in WhitecliffH20 Sports in Whitecliff (Image: Google)

“So there were undoubtedly some big highs and then as we moved into the early part of 2022, what we saw was the Ukraine problem and then the starting of the economic cost of living crisis.” 

He described the shifts thereafter as “astronomical”, adding turnover dropped by 50 per cent. 

“My company at the time with my major supplier took some decisions for the season of 2022 that involved some heavy stockholding by ourselves that then incurred warehousing costs. 

“Sadly, as we got into the middle of 2022, it was very apparent that those sales weren't going to be there and the ability to sell the goods at the price that we wanted to sell them wasn't going to be there either. 

“And again, like many sectors, you then see untold discounts from suppliers who then have to move their equipment.  

“H2O Sports' problem is it had all that stock in place already and purchased at the higher value, so then the removal of that stock meant that we were selling at prices that were deemed to be the market value and in some instances we were either losing money or breaking even.” 

In H20 Sports’ case, it was the supplier that “bore the brunt”, leaving the business to “continue to muscle on” as best as possible, Matt said. 

He kept on his four staff, has honoured supplier debts and obligations as well as customer’s orders, he added. 

H20 Sports Ltd, the registered company, is in the process of being liquidated with £1m in debt, but a new registered company has been set up, rebought the assets from the liquidator as well as the debts owed to suppliers to continue trading as H20 Sports the brand. 

“These suppliers weren't surprised, they knew what was going on. They've seen it in other areas they get with other shops across Europe,” he added.  

“They're doing the same problems and the problem is sometimes the bigger you are, the harder you fall.” 

Joint Administrator Mike Fortune, of Leonard Curtis, said: “This is a slightly different business case in that the impact of pandemic regulations actually resulted in improved sales for the business initially - before supply chain issues created challenges around fulfilling orders. 

“Customer behaviour also changed during this period - with people shopping around different stores to obtain the equipment they wanted as quickly as possible. 

“As the pandemic regulations were lifted, ordinary routines resumed, and interest in water sports waned for some people who found they suddenly had less time to pursue it. 

“The cost of living crisis and the reduction in disposable income also resulted in a big drop off in sales across the industry and the business model was no longer viable. The silver lining is that we have managed to secure a sale and most importantly of all save jobs.”