THE country’s biggest online fair trader Ethical Superstore has confirmed its sale last week to Spark Response was partly prompted by the withdrawal of key investors.

The online retailer, launched by Andy Redfern and Vic Morgan five years ago, revealed its assets had been bought by fellow Gateshead company Spark Response last week.

The deal followed talks with administrator Bridge Business Recovery LLP, which became involved in early February after backer FW Capital ceased its funding.

Ethical Superstore co-founder Andy Redfern said the deal came at the end of “the worst three or four weeks of my life”.

He said: “We’d had successful venture funding rounds every year for five years. There was absolutely no reason to suspect we wouldn’t have another round to help the business grow to the next level. Vic and I were completely gobsmacked.”

Fellow funder Northstar Ventures had already indicated it would not be continuing funding just before Christmas, and when FW Capital withdrew, the company sought advice. The reasons for the withdrawals have not been detailed but market analysts have noted concerns about the growth of ethical retailing as consumers keep a closer rein on spending.

Redfern said it owed around £2m to creditors in its accounts to the end of June last year.

Ethical Superstore’s assets were subsequently sold to its largest trade creditor Spark Response. Spark Response managing director Peter Slee said Spark was owed around £170,000, and paid in excess of £100,000 for the assets.

He added that he only expected to recoup a small part of this debt from the administration process for the remainder of the business.

Redfern and Morgan are also owed loans and own 10% of Ethical Superstore each, but are also down the list of creditors.