The Sofa Workshop appoints PwC as administrators
Given the cash flow position of the business, potential sale options were explored with the aim of a purchaser providing the funding required to continue to deliver the business plan and take the company forward. However, no viable offers were received.
The Sofa Workshop has collapsed into administration and has appointed Toby Banfield, David Baxendale and Zelf Hussain of PwC as administrators.
The company, a mid-market UK upholstery retailer, has 16 stores across the UK. Despite achieving “significant” revenues, these have been outweighed by trading losses, especially in light of Covid-related supply chain disruption and significant increases in transportation costs on importing goods from Asia into the UK over the last year.
Consequently, PwC said the business has been unable to meet payments as they fall due and has remained reliant on the support of its shareholder.
Given the cash flow position of the business, potential sale options were explored with the aim of a purchaser providing the funding required to continue to deliver the business plan and take the company forward. However, no viable offers were received.
Immediately following the administration appointment, the existing customer order book was sold to Timothy Oulton United Kingdom Limited (“Timothy Oulton”), part of the Halo Group (the “Group” ) – which is the owner of The Sofa Workshop Limited.
According to PwC no disruption to the manufacture of customer orders is expected. It is the intention of Timothy Oulton to fulfil all existing customer orders on the terms which have previously been agreed.
Toby Banfield, joint administrator and PwC partner, said: “Unfortunately, given the sustained level of losses, the directors had no option but to appoint administrators to protect the creditors of the Company. Sadly, this has resulted in 77 redundancies having to be made today. We will do all we can to support workers impacted by the administration.
“From today, the company’s 15 stores and the website will cease to trade and no further orders will be taken. One store, 204-208 Tottenham Court Road will continue to trade for up to 14 days in order to sell through the floor stock.
He added: “However, I’m pleased that we have been able to sell the order book, ensuring that customers will receive their outstanding orders.”
At this stage, the administrators will not be able to provide further information regarding customer orders or deposits. However, customers will be contacted directly by the group as soon as possible to provide a further update on the status of their orders.
