New report reveals fate of Multiyork’s creditors and customer orders
PUBLISHED: 12:31 31 January 2018 | UPDATED: 14:13 31 January 2018
Archant Norfolk 2018
Challenging trading conditions relating to the Brexit vote and last summer’s impromptu general election contributed to the collapse of an East Anglian furniture chain, a new report reveals.
The political situation and resulting tremors, including sterling’s depreciation, led Multiyork’s owner to put it up for sale – a doomed endeavour which ultimately led to the failure of the chain after attempts to find a buyer were unsuccessful, according to the document from the firm’s administrators.
And it adds debts of £11.9m to unsecured creditors are unlikely to be paid.
When administrators from Duff and Phelps were appointed 557 people were employed at the company’s Thetford head office and factory and in 50 UK stores, including in Norwich, Ipswich and Mellis, the Suffolk village where it was founded.
A new report by Duff and Phelps says the attempted sale followed Multiyork’s first profitable year for six years in 2016, when it made a profit after tax of £441,000.
But it said the company “had exhausted all its available working capital facilities with no prospect of raising immediate additional funding in order to allow [it] to continue trading”, with only £447,568 in cash when it went under.
An administration process was initiated on November 20, during which the business kept trading. The report said that while no new customer orders were taken, 2,537 were outstanding with an estimated total value of £8.3m.
“Significant” salary arrears were also discovered among the company’s employees, which the administrators paid “to maintain goodwill and assist with the completion of customer orders”.
As of January 12 administrators had achieved gross sales of £6.4m, but costs accrued totalled £1.1m including the repayment of outstanding wages, salaries and rents.
The report said customers had been notified where it had “not been possible to fulfil an order”.
While a number of parties expressed an interest in buying the company no “suitable” offers were made, therefore on December 12 the decision was taken to begin winding it down with 112 staff immediately made redundant at its Stephenson Way headquarters.
When the administrators’ report was published on January 16, manufacturing had ceased and 14 Multiyork stores had already ceased trading, with the rest expected to close by the end of January.
An auction is to be held at the end of February at the Thetford head office, when remaining products and company vehicles will be sold.
In December DFS struck a £1.2m deal to buy eight stores leases and the intellectual property rights of Multiyork including its trademark product designs – effectively signalling the end of the Multiyork Furniture brand, which helped safeguard 35 jobs.
Another furniture firm owned by the Wade Group, Feather and Black, was bought out of administration by HA Group at the end of last year.
A consortium of investors with e-commerce and wholesale experience said in January it was interested in taking on Multiyork’s Thetford site, but had not made a formal bid to Duff and Phelps by the time the DFS deal was concluded.