Homeform set for administration as pre-pack looms
A question mark hangs over the future of Homeform this morning after the company revealed it was set to go into administration. The business, which has its factory in Wolverhampton and owns Kitchens Direct, Dolphin Bathrooms and Moben Kitchens, employs 1,300 people across its 160 showrooms and uses the services of 1,500 self-employed fitters and designers.
It has now filed an "intention to appoint administrators".
Homeform, owned by private equity firm Sun European Partners, said it will appoint an administrator within ten days, but in the meantime hopes to put a deal together to buy back part of the group. A pre-pack deal would see its debts written off.
It is understood the directors are looking to sell the Moben and Dolphin brands in a bid to save the Sharps and Kitchen Direct businesses.
In a statement, the company said: "The directors are close to securing a deal that will safeguard the future of the Sharps (Bedrooms) and Kitchen Direct businesses and have mandated advisers to seek a sale of the Moben and Dolphin brands."
HomeForm has not revealed how many customer orders were outstanding and whether they would be honoured.
A spokesman for Sun European Partners said: "Unfortunately, the company’s performance was severely impacted by the rising levels of unemployment in the UK and a very difficult housing market – all factors leading to a steep and continued decline in consumer demand.
"Orders declined even more rapidly in the first half of 2011, further underpinning the negative trends in the business.
“After carefully assessing its options, the directors of Homeform Group have decided to file a notice of intention to appoint an administrator. Options to safeguard the future of certain business units are currently being examined."
It is not the first time the company has gone bust. Sun European Partners rescued the group from administration in 2007. The looming administration comes just days after the company launched a £12m advertising campaign for its Kitchens Direct brand.
Homeform's latest accounts, filed at Companies House, indicate that the company made a pre-tax loss of £6m in the year to 28 March 2010 against sales of £151.2m.
