Mon, 07 Oct 2024 | ADMINISTRATION
Delcor Furniture, a Northumberland-based luxury sofa, beds and chair manufacturer, has been acquired via a pre-pack administration. The Seaton Delaval business, which dates back to 1967, appointed Seneca IP as administrator on September 26 2024, with owner Jeff Harris blaming the cost-of-living crisis and rising energy prices for causing a decline turnover..
The pre-pack deal has saved 42 jobs at the company – all of its employees according to its most recent annual accounts. According to the company, the majority of these employees have worked at the business for 20 years.
Despite traditionally being more recession-proof than other retailers or manufacturers, demand for luxury goods has suffered in recent months. This has been attributed to factors including diminished consumer confidence, as well as a weakening demand from major international buyers. Delcor, which has two showrooms and two franchise outlets, said it had been forced to close an outlet in London as a result of rising costs.
According to its accounts in the year to September 30, 2023 Delcor had current assets of approximately £1 million. However, creditor amounts falling due within one year amounted to around £1.3 million, with the company's net liabilities totalling nearly £650,000.
According to Harris, the pre-pack administration has given the company a £1.1 million boost to its cash flow. It also protected small materials suppliers which also provided a boost to the local and national economy, given that Delcor’s furniture is handmade in the UK.
Harris commented: “We’ve looked after the suppliers that are obviously small businesspeople, like us. I don’t think there’s any businessperson or company that’s lost anything. They’re our suppliers - some of them were willing to lose a little bit.”
In addition, the pre-pack has wiped its debts to both lenders and HMRC with Harris stating that the company's sales have also begun to pick up again over recent months. Following the previous closure of the company's London outlet, the business is now said to be a "lighter", more profitable operation.
Click here to find out more about regulations surrounding pre-pack administrations
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