February 21, 2010

Red Driving School Crashes into Bankruptcy

Landsdowne Venture Group (LGV), the parent company of “The Instructor College” and “Red Driving School” has gone into administration.

The company made a net profit of £3m in the year to October 4 2009, but in the 16 weeks to January 24 lost £2.5m.

LVG employs 400 people in total across three offices, but all the Red Driving School instructors are franchisees.

LVG’s 400-strong workforce includes 200 people at its head office, and 150 spread across two “operational support facilities” in Liverpool and in Bellingham near Middlesbrough. It makes most of its money from training driving instructors who pay fees of about £3,500.

Trainees who cannot afford to pay fees up-front often take out a loan to cover the cost of the course. “The Instructor College” used to offer loans through Barclays but the bank withdrew that facility after huge number of defaults by trainees unhappy with the training they received.

The company that was to become LVG began in 1992 when David little and Nick Buckingham founded Airport driving School in Croydon.

They expanded into instructor training then merged with accountancy FBTC, renaming the joint operation Landsdowne, now known as LVG.

In 2004 they launched the Red Driving School and acquired Letsdrive, after LetsDrive went into administration.

Natasha Simper of Britannia Driving School said: “The 400 operational staff, trainee instructors and the franchisees must be distraught at the news, not knowing what is going to happen to them next. Part of the problem is that in the two years from March 2007 to March 2009, the number of new applications for provisional licences fell 34 per cent. I’m happy to say that in the same period Britannia’s bookings have increased by 43 per cent.”

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