The Harveys furniture chain has gone into administration with the immediate loss of 240 jobs and putting more than 1,300 others at risk.
Administrators from PwC are seeking a buyer for the retailer including about 20 stores and its three manufacturing sites.
All its stores will continue to trade for now, but industry watchers believe a buyer is unlikely to be found. The retailer has been struggling for years and is also heavily reliant on sister chain Bensons for Beds with which it shares several sites.
Bensons was also put into administration on Tuesday, but has been bought out in a pre-arranged deal by its private equity owner Alteri Investors, with the aim of saving between 150 and 175 of the chain’s 242 stores, its Huntingdon manufacturing operation and nearly 1,900 jobs.
The buyout involves new investment of £25m into Bensons by Alteri. All current Harveys and Bensons’ orders will be honoured by the ongoing business.
Zelf Hussain, joint administrator at PwC, said: “The group had been facing increasingly challenging trading conditions in recent months, in particular the Harveys furniture business. This has resulted in cashflow pressures, exacerbated by the effects of coronavirus on the supply chain and customer sales. It has not been possible to secure further investment to continue to trade the group in its current form.”
Harveys and Bensons’ parent group appointed administrators from PwC on Tuesday morning after a tough period of trading for furniture retailers who were suffering from a slowdown in the housing market and low consumer confidence even before the government-imposed high street shutdown forced them to temporarily close stores in March.
“The restructuring, whilst obviously difficult for Harveys’ employees, will safeguard more than half the group’s workforce and is a necessary milestone on Bensons’ journey to becoming a market-leading beds retailer with a strong omnichannel presence,” said Gavin George, the chief executive of Alteri.
“We will continue to work closely with the management team on the turnaround of the business which we believe can have a bright future, despite the challenges facing the retail industry, including the long-term impact of the coronavirus pandemic.”
Alteri bought Harveys, which was founded in 1966, and Bensons, which has been in business for 70 years, in November last year.