Long Eaton-based frames and upholstery manufacturer Conker Bespoke Furniture has been sold in a prepack deal after entering administration.
Michael Roome and Dean Nelson, of PKF Smith Cooper, were appointed as joint administrators of Conker Bespoke Furniture Limited on 2 July 2024.
Ahead of its collapse, the business grew to a turnover of c.£6m and returned a profit of £300,000 by March 2023 after six years of trading.
Despite the continued positive performance, Covid-19 impacted the business with the company owing the HMRC a large debt. Towards the summer of 2023, trade significantly decreased, as losses began to incur each month.
To mitigate this impact, the business looked to implement price increases on its products, although this was met with resistance from purchasers and would have resulted in a further decrease in trade. Instead, the company sought to cut costs, however this was not enough to prevent further losses.
Additional third-party funding was also sought, but failed in attempts to secure such a financial injection, leading to the directors investing capital to repay its secured lender and help reduce cashflow pressures.
Despite these efforts, the business was unable to make sufficient savings and it became apparent that insolvency was unavoidable.
Upon entering administration, a prepack sale of the business and assets was secured for a sum of £236,000, with £5,000 paid on completion, to Conker Furniture Limited, a company connected with the same director.
The sale also saw the transfer of all 54 employees to the new business, which was incorporated on 17 June 2024.
As for creditors, the business owed preferential creditor, the HMRC, a total of £648,000, which is expected to recoup some of that figure from realised assets valuing £235,000. Unsecured creditors are owed almost £1.5m, with £365,000 owed in bank loans and over £900,000 owed to the trade. It is expected that creditors will suffer a shortfall of £2m.
“The joint administrators weighed up the advantages of a swift sale, which would avoid the ongoing costs of storing and marketing assets, against the potential of attracting a better offer, albeit that this would involve incurring more costs,” administrators said.
