Furniture wholesaler Kettle Home owed creditors over £5m ahead of entering liquidation.
On 9 October 2024, Kevin Mapstone and Yiannis Koumettou of Begbies Traynor were appointed as joint liquidators of Corby-based Kettle Home Ltd.
The company commenced trading around April 2023, following the administration of Kettle Interiors, which had been importing and supplying wholesale furniture to the trade and public for over 30 years.
At the time of the appointment, liquidators said that a sharp rise in the costs of shipping made the business unsustainable and unable to continue to trade. All staff, comprising 80 part-time and full-time employees, were made redundant.
“The company faced several major delays from its supply chain which caused a significant reduction in stock availability which had a direct impact on income,” the report said. “Sales volumes dropped throughout January to June resulting in an income budget deficit and a drop in working capital.
“The situation was made more severe with the closure of the Suez Canal to container traffic. The impact was twofold, firstly transit times increased on average by around 3 weeks. During the initial 3-week period the lack of container arrivals severely impacted income against budgeted levels. The company’s contracted rate with its main forwarder which was agreed from April was not honoured by the shipping lines and this meant rates increased by more than 500% at its peak. This increase had a huge effect on profitability and working capital with significant increases on freight costs within a 3-month period.”
Furthermore, the company had fallen behind on its repayment obligations leading to the creditor position becoming “unsustainable”. This led to the company’s only source of funding, from Cynergy Business Finance Limited, being withdrawn.
According to newly filed documents on Companies House, Kettle Home owed preferential creditor, the HMRC, £750,000, while employee claims at this stage are uncertain.
As for unsecured creditors, claims totalled £4.8m, including £1.4m to Cynergy Business Finance Limited, £1.7m owed to JPK Trading Ltd and £1.6m owed to Kettle Interiors Asia Co. Ltd. It is expected that creditors will suffer a total shortfall of around £5.2m.
