A UK furniture manufacturer and distributor has been sold in a pre-pack deal following financial difficulties and administration.
Photo: Southernsbroadstock.
Southernsbroadstock, which supplies office furniture to corporate, health, education, and retail sectors, entered administration on 20 January 2025. Joint administrators Michael Magnay and Mark Firmin of Alvarez & Marsal Europe LLP were appointed to oversee the process.
The company faced lower-than-expected sales in the first quarter of FY25, largely due to financial struggles within the higher education sector in 2024. Delays in projects and cash flow pressures led to a decline of around 35% in sales for the five months to November 2024, resulting in an operating loss of £1.2m.
Despite a shareholder cash injection of £300,000, additional funding of £3.5m could not be secured, forcing the business into administration. It was subsequently sold to Southerns Broadstock Interiors Limited, a connected party incorporated on 9 January 2025, for £240,000, paid in full. The sale ensured the transfer of 79 employees under TUPE.
Creditors are expected to face significant losses. HMRC, a preferential creditor, is owed £320,000, while unsecured creditors are owed a total of £3.8m. Administrators indicated that creditors are likely to suffer a shortfall of the entire amount owed.
Source: www.bigfurnituregroup.com