Family-run carpet business Adam Carpets Limited experienced widening losses ahead of entering administration as creditors await potential realisations.
Joph Young and Conrad Beighton, both of Leonard Curtis, were appointed as joint administrators on 20 March 2025.
The business, based in Greenhill Works Industrial Estate on Birmingham Road, Kidderminster, previously reported turnover in the region of £7m but suffered a decline in orders and sales since the election was announced in May 2024. Its position thereafter failed to improve.
Upon appointment, the company ceased to trade with all 51 staff being made redundant. Administrators said that tough economic conditions, declining sales and footfall had continued to put immense pressure on the company.
In its latest set of accounts documented by the administrators, the business saw turnover slip from £8m in 2022 to £6.6m in 2023 and again to £5.8m in 2024. Its profit of £606,000 recorded in 2022 fell to a loss of £282,000 the following year. Losses widened further to £368,000 in 2024.
Administrators continued to trade the company to maximise the value of the business in order to maintain customer orders and stock realisations, with orders and suppliers paid on a proforma basis. Its trading profit from this period resulted at £90,000.
The company and assets were also marketed for sale, with the campaign resulting in 45 expressions of interest, with 26 then signing non-disclosure agreements for further information. However, despite the strong interest, no offers were received for the business and assets.
Administrators deemed it then appropriate to realise the company assets on a piecemeal basis, with 10 offers being received to purchase various items of machinery and other assets. At this stage, there was no further information on any sales completed.
As for creditors, secured creditor Praetura Commercial Finance is owed almost £1m and is likely to be repaid from the sale of company land and properties, which are valued at around £2.2m. Preferential creditor employee claims totalled £37,000 and the HMRC is owed £168,000, with both expected to be repaid in full too.
Unsecured creditors are owed £5.1m, with £3.7m associated to a pension deficit and £666,000 owed to employees. Trade creditors are owed a combined sum of £767,000. It is expected that creditors will suffer a shortfall of £3.4m.
On the appointment of administrators, Managing Director Chris Adam previously said: “It’s with huge sadness for all the people involved that we are announcing Adam Carpets Limited ceased trading on Thursday 20th March 2025.
“Despite the best efforts of all our colleagues, the current economic environment means that UK consumers simply do not have the confidence in their finances to buy enough of our high-quality wool-rich carpet to make our business viable right now.
“The significant increase in taxes in the government budget last October as well as the April tax increases to come both mean that this situation is getting worse.”
