A rescue plan is to be put in place for the company behind the Irish Fairy Door brand.
This follows accountant Joe Walsh being appointed as "Process Advisor" to the business and Mr Walsh will now be tasked with drawing up the rescue plan.
Documents lodged with the Companies Office show that Mr Walsh, MD of JW Accountants, was appointed on Tuesday of this week.
The role of "process advisor" is part of a new Small Company Administrative Rescue Process (SCARP) that has been introduced to provide a quicker and more affordable restructuring option to small and micro businesses here.
The company's miniature fairy doors are enjoyed by children in around one million households worldwide and has enjoyed an endorsement in the past from Kourtney Kardashian.
A spokeswoman for the Irish Fairy Door Company (IFDC) said today that "the directors are very confident the company will be able to successfully exit the SCARP process within a short period of time".
"The company made the decision to enter into the SCARP process," she said.
She added that the SCARP process "allows small companies a period of time to restructure its debts with a view to ensuring the company can trade as a going concern into the future".
As part of the SCARP process, a process advisor notifies all creditors within five days of their appointment and requests the submission of claims.
The SCARP rules show that Mr Walsh has 42 days to form a rescue plan to propose to the company's creditors and ultimately restructure the company's debt.
Companies continue to operate "business as usual" as the SCARP process takes place.
The most recent accounts for the Irish Fairy Door Company (IFDC) firm, CEBL Ltd show that its accumulated losses had increased to €3.9m at the end of December 2020. The company had a shareholders' deficit of €673,493 on that date.
The firm recorded losses of €268,137 for 2020, losses of €422,011 in 2019 and €1.6m in 2018.
The IFDC signed a global animation deal with Wildbrain parent, Canadian firm, DHX Media for a YouTube animation series "Through the Fairy Door" which went live on YouTube in July 2019.
At the time the company described the series "as a game changer for us" and expected the animation series would deliver a 10 fold increase in revenues to the business.
However, within months the Covid-19 pandemic shut down retail around the world with a company spokeswoman previously stating that "Covid-19 has had a massive impact on our bricks and mortar toy store sales".
The firm transitioned to a licensing model in 2019 and 2020 and the costs associated with changes to supply chain, staffing, and sales and marketing models contributed to losses for those two years.
At the time, sales of the company's core product, the Irish Fairy Door, made up 40% of the company’s revenues.
Reporting by Gordon Deegan
