Huddersfield-based mattress manufacturer Joseph Furniture Ltd has been sold in a prepack deal after being placed into administration.
Colin Wilson and Emma Mifsud, both of Opus Restructuring LLP, were appointed as joint administrators of Joseph Furniture Ltd on 31 July 2024.
This marks a second prepack deal following the administration of sister company, beds and mattresses retailer, BedWorld after the same administrators were appointed to Bedworld Factory Shop Limited on 10 July 2024. Read more.
As for the latest insolvency, upon entering administration, the company assets were sold to Express Beds Ltd, a connected company with the same director and also the same acquiring company of BedWorld, for a sum of £96,200.
The sale saw £40,000 received on completion, with the remaining balance to be paid in eight monthly instalments of £6,244 and one final payment of £6,248.
In total, Express Beds Ltd acquired both businesses for a sum of £180,700.
In the build up to its administration, Joseph Furniture Ltd experienced a major drop in demand alongside financial difficulties associated with pandemic-era investments.
Sales had continued to decline from £15.7m for the year ended March 2021, to £12.8m the following period and then again to £7.6m in 2023. Pre-tax losses widened over this three-year period too, from £44,000 to over £100,000.
The company required additional funding, which was unachievable via the bank and investors. Due to its position, the only option was to initiate an insolvency process.
Administrators conducted a swift marketing process and received 10 interested parties requesting further information before completing the sale to Express Beds Ltd.
As for creditors, preferential creditor, the HMRC, is owed £400,000, while unsecured creditors are owed £2.1m. These included £750,000 owed to its landlord, £435,000 owed to Apollo Beds Ltd and £360,000 owed to Google. It is expected that creditors will suffer a total shortfall of £2.4m.
When combining the creditor shortfall of both businesses that entered administration, creditors are set to lose out of a total of £2.8m.
