Beds and mattresses retailer BedWorld has been sold in a prepack deal after entering administration.
Colin Wilson and Emma Mifsud, both of Opus Restructuring LLP, were appointed as joint administrators of Bedworld Factory Shop Limited on 10 July 2024.
Ahead of entering administration, the business, which trades from 19 stores across the UK, suffered from the Covid-19 pandemic but did bounce back with record sales once restrictions were lifted during 2021.
Its most recent financial records state that turnover for the year ended 30 November 2022 reached £5.4m, with a pre-tax profit of £44,000.
However, during the 2022-2023 period, the cost-of-living crisis severely impact sales, which plummeted by half and continued to decline, while costs remained the same or increased. This led to cash flow suffering and despite making small weekly payments to offset rising debts, the amount owed creditors continued to grow.
In January 2024, further pressure was placed on the company after it began to receive demands and bailiff letters due to the outstanding debts. Due to its loss-making position, the company decided to close 10 of its stores, making 13 staff redundant.
In addition, on 3 July, the landlord of the premises at its Hull store re-entered the property, forfeiting the lease and forcing the shop to close. Insolvency proceedings soon followed.
Upon the appointment of administrators, the business and assets were sold to connected company Express Beds Ltd, who share the same named director, for a sum of £84,500.
A total of £20,000 was paid upfront on completion of the sale, while £28,000 is due for rent deposits to be payable after six months and the remaining balance of £36,500 to be paid over eight instalments of £4,055 and one final payment of £4,060.
As for creditors, preferential creditor, the HMRC, is owed £156,000, while unsecured creditors are owed £330,000, which included a combined sum of £99,000 owed to nine councils and £185,000 owed to the trade. It is expected that creditors will suffer a shortfall of £404,000.
