Dore UK – brought down by unsustainable debt?

As Dore (DDAT (UK)) have recently announced they have called in the advisors coupled with the recent move into administration of Dore Australia it is worth examining the state of the Dore finances as staff and clients are now creditors. The situation in Australia saw heartbreaking tales of staff finding themselves out of work and unpaid and customers losing thousands of dollars with the administrators stating it is unlikely that any money owed will be paid. Unfortunately the finances of DDAT (UK) suggest that creditors in the UK will not be paid either.
In January I reported that the DDAT (UK) accounts showed an accumulated loss of £6.8m, I have now accessed the 2007 accounts and can report that they have lost a further £1.5m bringing their accumulated loss to ~£8.3m. The bulk of this loss seems to have been funded by loans due within one year, possibly loans and suppliers’ credit accounts rather than directors loans, this suggests that Wynford Dore has shifted some of the burden of debt from himself to others who may have lacked his passion for Dore making the financial status of Dore increasingly unstable. This also means that despite asking for fees upfront they currently did not seem to have the available finances to provide the related services, they had to continually seek new customers to pay for the services due to existing customers*.
This suggests that despite a Dore statement of support for customers there is no way they will be able to provide services, there is also no mention of whether or not staff and clients will receive unpaid wages and refunds. Phil Hall Associates, Dore’s PR company, has stated this morning that:

Dore UK has not gone into administration. A spokesman for Dore said: “The business is being restructured to make it more cost efficient. We will be communicating directly with our clients. Plans are being drawn up to ensure that every patient is able to complete their programme. Wynford Dore has subsidised the programme to the tune of £15 million and is unable to sustain that level of investment any longer.

While claims that Dore has not gone into administration might be welcomed it is worth pointing out that similar claims were made about Dore Australia before that collapsed with clients unable to receive refunds or complete the programme. The Dore statement tried to apportion blame not on Dore itself but on the civil service and Government in Australia. It is worth reading Brainduck’s analysis of the Dore statement on Australia to see just how wrong headed it is in its blaming of Government for Dore’s failure. Sadly this is an argument Wynford Dore continues to push. This statement was recently issued to Dore clients:

Today I have had to make the hardest decision of my life- to suspend operations at the 13 UK Dore Centres. Having devoted the last 10 years of my life to help my daughter, Susie and thousands like her achieve their potential means that I know the concern you will feel now about any interruption to our service.

We have invested many millions into the research that has created the programme and to developing into its present state where it has the scientifically proven results that parents, their children and their teachers constantly report.

We have worked hard to persuade education authorities to provide this programme within the school system at low or no cost to parents, and although there are more and more teachers and other professionals supporting the benefits of the programme, the government has failed to act. As a consequence parents still bear the burden of solving their children’s learning issues.

My passion has been for this to reach everyone that needs it – so far I have not succeeded, as, despite the fact that so many have benefited so much from the programme and that the research findings have been so remarkable – it has still required enormous subsidy from me personally for it to continue. It is with deep regret that I am unable to sustain this financial burden any more. Therefore I have called in advisors to help restructure things to help me to achieve my ultimate aim – which is to make this unique programme available to millions rather than thousands, and if possible with less cost to parents.

I know some of you will be as concerned and upset as I am at this interruption, especially if you were due for an appointment in the next few days. We are working hard to satisfy your needs for the short term and we will contact you next week to give you full details of what to do next.

Please accept my apologies if we are unable to answer all of your individual queries at the moment, I will be contacting you frequently with as much information as I can.

If, as Brainduck argues, this rationale is flawed in Australia where Dore struggled to become established, it is even more so in the UK where Dore has had a presence for many years. It is also surprising to see Wynford Dore claim that his treatment is scientifically proven, as Holfordwatch have reported, academics have cast serious doubt on Wynford’s logic and explanations and the little research that was published in creditable journals caused the resignation of five members of the journals board in protest at its flaws. This resulted in Dore eventually resorting to publishing results by press release in the local press, hardly a credible sign of genuine scientific enquiry. It also looks like that if Dore survive this then Wynford sees the way forward for the business as not providing treatment at dedicated centres but as a self help book or distance learning programme. It is simply not conceivable that the money exists to allow an exponential growth of centre’s to treat millions and that business model has been shown to be flawed. While it may make good business sense to dramatically cut costs and revert back to a publishing mode I can’t help but feel that those who needed the discipline and encouragement provided by frequent centre visits and consequent feedback are to be abandoned. It also bears repeating here that Wynford, like the statement on the Dore homepage, makes no guarantee that staff will receive unpaid wages or that refunds will be provided. In fact the lack of statements on this issue suggest a certain level of unethical behaviour. I blogged over a week ago about the collapse of Dore Australia and there were reports then of clients paying after it was alleged that senior management knew of the impending administration. It seems the same allegations are now being made about Dore UK.

I can’t help but wonderif the harm Wynford feels dyslexia caused his daughter has resulted in a single minded obsession that has caused him to plough millions of his own money into his treatment, bully researchers, publish dubious research, take advantage of and ultimately abandon clients and staff. He has failed to slay his great white whale and that failure has come at some considerable cost.

I will comment further tomorrow.

*Many thanks to Skidaddle for explaining the finances.