Sat, 16 Jul 2011 | BUSINESS SALE
Abbeycrest, the Leeds-based jewellery group set up in 1979 by Michael Lever and Peter Rosenberg, could soon be put on the market if it cannot find a way to drastically reduce its costs.
Although the jewellery designer and maker extended its lending facilities in May, the relentless rise in precious metal prices were having a severe effect on the performance of the business.
In an update from Abbeycrest last week, a spokesperson said that although the financial year started satisfactorily, the firm’s recovery had since been impeded by “difficult trading conditions”, which included precious metal price hikes, weak consumer demand and “retailer action to protect volumes”.
2010 was a tough year for Abbeycrest, as gold prices escalated by 30 per cent over the period with average monthly prices of £825 an once – compared with £636 an ounce in 2009.
Working capital requirements must be reduced by around £700,000 by October. If it cannot save these costs or borrow more from its lenders, then a trade sale of the business may well be on the cards. To make matters worse, gold is continuing its relentless rise with prices at £987 an ounce this week and no sign of a break, with investors sheltering in precious metals as the Eurozone crisis continues and US debt problems escalate.
Abbeycrest recorded a £2.97m pre-tax loss in the year ended February 2011, compared with profits of £1.56m in 2010.
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