Wed, 12 Jun 2013 | ADMINISTRATION
Furniture retailer Dwell is on the brink of entering administration and could collapse as soon as today.
Duff & Phelps are in place to take on the administration if things fall in that direction. The business originally appointed Argyll Partners last month to find a buyer for the company but time is running out and the company may end up being put through a pre-pack administration process.
A statement from Dwell, published in the Telegraph, read: “The current economic environment is uncertain, consumer confidence is low and trading conditions are challenging within the declining household and furniture sector.
“As such there remains a risk that the economic situation will worsen and with this in mind the group is taking prudent steps to reduce costs and improve operational efficiencies.”
It added that the business had been planning on focusing on “the best opportunities that can deliver rapid earnings and cash pay-backs” during the 2012/13 financial year. This included opening six stores over the past year, including its Birmingham outlet in the Bullring shopping centre and a store at the Lakeside shopping centre.
Unfortunately, it looks like the company's debts are preventing it from capitalising on its efforts. The firm has net debt of £6.1 million, but has £11.7 million of debt due for repayment during the next 12 months.
Dwell, which is owned by Key Capital Partners, posted pre-tax losses of £1.69 million in the 12 months to 27 January last year, up from £439,721 in the previous records.
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