Focus DIY poised to appoint administrators: dramatic online announcement
Cheshire-based home improvement chain Focus DIY is on the verge of appointing administrators in a move which will put 4,000 jobs at risk.
A dramatic message on the company’s website this evening states: “Following notification of an event of default under the senior credit facility, and a realisation that there were no alternatives that could be explored any further, Focus Directors have come to the conclusion that to protect the interests of creditors they have no choice but to seek protection through filing a notice of intention to appoint administrators.
”The Directors have sought consent from the business's lenders to appoint E&Y as the administrators. All stakeholders including staff are being informed.”
The chain also has a significant media budget which is spent through London-agency Krow and media buying points EGS and 7 Stars under the direction of marketing director Michael Greenhalgh, who was previously marketing director at MFI.
The chain is majority-owned by equity firm Cerebus, who originally bought the chain for £1 in 2007 and took on £200m worth of debt. According to reports the company is struggling to meet its financial obligations due to a ‘protracted period of difficult trading conditions’.
The collapse will add to a mood of despondency in the retail sector. Recently Oddbins also collapsed into administration and analysts say other chains are vulnerable.
Recently, corporate recovery firm Begbies Traynor warned of a rise in companies in financial distress, particularly among those exposed to consumer spending. Focus which has 178 stores, has been struggling for years with a weak housing market and stiff competition from companies such as B&Q and Homebase.
Chris Dawson, owner and founder of home, leisure and garden chain The Range, said today that he was interested in buying Focus DIY's stock and stores, if the price was right.
"I have a proven track record that I will do these kind of deals if people are serious and sensible," Dawson who bought stock and stores from collapsed retailers MFI and Empire Direct to help build his 51-store chain, told Reuters.
B&Q has also said in the past it too might be interested in taking on some of the Focus stores.