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Jobs at risk as Focus DIY seeks administration

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Almost 4,000 retail jobs are at risk following the home and DIY specialist Focus DIY’s announcement today that it is “filing a notice of intention to appoint administrators”.

Directors at the retailer, which is majority owned by Cerberus Capital and has around 170 stores, have sought consent from its lenders to appoint Ernst & Young (E&Y) as administrators. All stakeholders including staff have been informed of the plans.

E&Y is currently not commenting on the process and cannot confirm whether it will be representing Focus DIY in any administration negotiations.

Today’s Focus DIY statement said: “Following notification of an event of default under the senior credit facility, and a realisation that there were no alternatives that could be explored any further, Focus directors have come to the conclusion that to protect the interests of creditors they have no choice but to seek protection through filing a notice of intention to appoint administrators.”

In a retail review of last year for Retail Gazette, Verdict Research’s Consulting Director Neil Saunders earmarked Focus DIY as a company facing a particularly challenging 2011.

Commenting on the company last December, he explained: “Being a relatively weak player in a slow growth, highly competitive market is not an ideal position to be in at the best of times.

“In the relatively weak environment of 2011, it could well prove to be disastrous.”

It seems Saunders’ predictions have proved correct, although Focus DIY’s slump has not occurred over night.

Back in 2009 the company’s landlords agreed a company voluntary arrangement to stave of administration, and sales have struggled ever since.

Earlier this year supermarket chain Asda acquired six Focus DIY stores as the DIY firm looked to offload some of its property portfolio - and a number of staff expressed their surprise at the decision to Retail Gazette at the time.

Focus DIY could be saved from administration at the last minute, but even if the business survives staff are sure to be concerned about their futures.

Nigel Rothband, CEO of industry charity Retail Trust, said: “Any member of staff worried by today’s news should pick up the phone and ring our helpline.

“After the demise of Woolworths two years ago we launched a programme called ReWork, which is designed to offer advice and guidance to retail staff, and help keep the talent within the sector. Concerned Focus DIY staff should give us a call.”

Published on Wednesday 04 May by Editorial Assistant

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