Upholstered furniture and soft furnishings manufacturer Belfield Group and its subsidiary companies were placed into administration ahead of its recent new ownership acquisition.
Sarah O`Toole and Edward Williams, both of PricewaterhouseCoopers LLP, were appointed as joint of administrators of Belfield Group Limited, Tetrad Limited, Belfield Furnishings Limited, Clinchplain Limited, Belfield Holdings Limited and Westbridge Furniture Designs Limited on 11 February 2025.
Detailed in newly filed documents on Companies House, it explained the position of the group and the build up to the appointment of administrators, citing a market-wide slowdown, higher interest rates and consumer spending pressures, alongside the loss of a major customer that accounted for around 21% of its revenue in FY24 – in relation to M&S exiting the furniture market – as key contributing factors to its performance.
According to its most recent filed accounts for the year ended 31 December 2023, total sales fell 13.8% to £112.6m from £130.7m in 2022. Pre-tax losses widened from £8.8m to £11m.
The group undertook a number of actions to address its costs, with around £15m of savings achieved during 2023 and 2024, which included the exit of two Westbridge sites in the UK and one within Westbridge Romania. Furthermore, a reduction in staff across all trading divisions was implemented, as well as securing new contracts as ‘replacement revenue’ to cover the lost customer.
Despite this turnaround, the group’s medium-term forecasts updated in late 2024 indicated a forecast funding requirement of £4.3m, with an initial funding shortfall expected in early February 2025. Existing shareholders and secured creditors were not in a position to provide additional capital to meet the funding required.
The group decided to explore the possibility of a sale and new investment on a solvent basis, wit PwC first engaged on 20 December 2024. A total of 41 parties were approached, but failed to generate any solvent offers being received, primarily due to the level of debt in the group.
Due to the group’s cash runway, a shortened timeline was needed, however creditor pressure, including threats of winding-up petitions, meant continuing to trade the business for an extended period of time was not sustainable. In transpired that two parties submitted offers on a basis of a prepackaged sale, with one later being accepted.
Upon appointment of administrators, the group was sold to Craft Group Holding Limited, Craft (Westbridge) Limited, Craft (Belfield) Limited, Craft (Tetrad) Limited and Craft (Clinchplain) Limited for a sum of £1m plus the amounts outstanding under a CID facility with Virgin Money.
The group has historically assigned all the rights to its trade debtor book to Virgin Money and upon appointment, it was agreed that Virgin Money would reassign all the trade debtors back to the group with a condition that the CID facility debt was settled. The purchaser acquired the debtor book for just over £8.2m, which settled the debt.
Furthermore, as part of the sale, the purchaser also has the option to acquire the shares of the Romanian entity (Westbridge Production SrL) for £1 within two months of the transaction.
Craft Group Holding Limited was subsequently changed to TBG Furniture Limited with all newcos incorporated on 4 February 2025 and owned by parent group Craft Topco Limited. All entities are affiliated with Blandford Capital LLP.
As for UK employees, 835 from the 875 staff moved over to the new ownership, while 40 staff were part of the ‘home division’, which was not part of the pre-pack deal, or had previously left the company.
With regards to creditors, the HMRC is owed a collective sum £4.6m – the largest of £2m being owed by Westbridge – and is expected to suffer a shortfall of the entire amount. It is also anticipated that unsecured creditors are set to suffer a combined figure of £79.8m across all the group’s entities.
Following TBG Furniture Limited acquisition, Tom Prestwich, CEO, and the management team will continue to lead the business under the new ownership. (See related).
