Thu, 21 Feb 2013 | ADMINISTRATION
Axminster Carpets could be the next big name to call in the administrators as the group looks for possible rescue solutions.
The firm confirmed that it has filed an intention to appoint administrators, which it is using in order to freeze creditor claims and buy time to try to find a way out of its tricky financial situation. Duff & Phelps are lined up to put the company into administration should things head in that direction.
Joshua Dutfield, group managing director at Axminster, commented: “Trading has been difficult and the management has been working with key suppliers, creditors and the lenders in an attempt to resolve the company's financial difficulties.
“We continue to be committed to working to achieve the best possible outcome for all concerned and most importantly the staff and suppliers.”
Axminster is one of the last rug manufacturers in Britain that still uses traditional weaving looms. The 250-year-old company counts Carpetright and the John Lewis Partnership among its biggest customers, but rising commodity prices and poor export rates during the recession have meant that even these big customers have not been enough to keep the firm on the right track.
The company made a pre-tax loss of £1.37 million in the year to December 2010, despite data showing that sales remained static. Furthermore, the firm owed about £11.8 million to short-term creditors; had bank borrowings of £10.8 million against assets of £19 million and interest on its loans that came to £371,000.
Analysts have suggested that the company's woes stem from its failure to keep up with and satisfy changing consumer tastes. The decline in the housing market as fewer people move into new homes has also hit Axminster hard due to the drop in sales.
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