The Bicester, UK warehouse of Utopia Distribution Services (UDS) has been acquired by its landlord, DP World, through a pre-pack administration.
UDS had been jointly launched in August 2023 by Proper Group, the financially troubled company formerly known as Utopia Music, in partnership with DP World. The warehouse services major labels, including Universal Music Group and Sony Music, as well as Beggars Group and Domino.
On Friday (December 13), UDS filed papers with the London High Court, disclosing its appointment of an administrator. DP World, UDS’s landlord, confirmed that it would acquire all services at the Bicester site previously operated by UDS.
“DP World is excited to enhance its entertainment services through its acquisition of Utopia Distributed Services Ltd. We are dedicated to partnering with you to deliver exceptional and reliable services in the future,” DP World said in a statement to clients obtained by MBW.
“Proper Music Distribution will no longer be affiliated with UDS or the warehouse at Bicester,” the company said, adding that “Proper Music Distribution is unaffected by the administration and business will continue as usual from the warehouse in Dartford.”
DP World also said it is “diligently working to integrate Bicester’s services into our broader network. While this complex and rapid transition presents some challenges, we are committed to minimizing disruptions and ensuring a smooth experience.”
In 2023, UDS entered into a GBP £100 million ($126 million) deal with DP World to provide warehousing and logistics services for physical music formats in the UK.
During the warehouse’s launch, the two parties said the Bicester site, which spans 25,000 square meters, would handle 70% of physical music and 35% of home entertainment products sold in the UK annually, with a daily handling capacity of over 100,000 units, increasing to over 250,000 during peak periods.
However, as Proper Group’s financial woes started to unfold, with UDS placed into administration, MBW understands that DP World has stepped in to take on the services. Previous plans to merge Proper into Bicester, a move that was expected to reduce costs for major and independent labels, have now been scrapped.
Drew Hill, the Proper Group Managing Director who headed the Proper Distribution division launched earlier this year, is also understood to be returning to Proper, which will continue to operate separately.
“Following the bankruptcy of the Swiss entity, I had hoped to keep UDS and Proper Music Group together,” Hill said in a statement to MBW.
“Whilst it’s disappointing to see the companies part ways, clients and customers of UDS can be assured that DP World intends to continue running the Bicester site and operations. In the meantime, it’s business as usual for Proper Music Distribution, which will continue to deliver the usual high standards of service over the Christmas period and into the New Year whilst I consider opportunities for the future.”
The collapse of Utopia Distribution Services follows the financial troubles at its parent company Proper Group. In September, a court in Switzerland launched bankruptcy proceedings against the company over an unpaid legal bill.
John Mitchell, CEO of Utopia Switzerland, admitted to Complete Music Update (CMU) that UDS has been “hemorrhage[ing] money month every month” since it was purchased out of a pre-pack administration by Proper Group in September 2022.
“The business would hemorrhage money month every month. We weren’t prepared to keep shelling out one and a half million pounds a month to subsidize the business.”
John Mitchell, Utopia Switzerland
Mitchell said the company’s shareholders had subsidized the business with about GBP £20 million (USD $25 million), expecting returns that never materialized. He added that the company was losing around GBP £1.5 million ($1.9 million) monthly, making it unsustainable.
“The business would hemorrhage money month every month. We weren’t prepared to keep shelling out one and a half million pounds a month to subsidize the business,” Mitchell said.
When UDS’s Swiss parent company was forced into bankruptcy last month over an unpaid bill of just CHF 23,000 ($25,800), financial support for UDS ceased, CMU reported.
Under its old name Utopia, the company generated some buzz with its acquisitions of enterprises like Quincy Jones-backed Musimap, UK warehouse and fulfillment firm Cinram Novum, publisher Sentric Music Group, Absolute Label Services and Absolute Rights Management, and Proper Music Group, the UK-based company after which Utopia renamed itself.
“It’s business as usual for Proper Music Distribution, which will continue to deliver the usual high standards of service over the Christmas period and into the New Year whilst I consider opportunities for the future.”
Drew Hill, Proper Group
However, financial difficulties soon surfaced. The company began a series of mass layoffs in late 2022 and divested assets like Sentric, Absolute, and ROSTR.
One sign of Proper Group’s financial troubles came earlier this year when the company told shareholders in April that it needed to raise GBP €6 million ($7.6 million) from them.
“We stated in the call that we are fundraising across several streams, and from you – the shareholder base – we need to raise €6 million,” the company said in a letter.
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