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Wednesday, 4 May 2011

Focus DIY in Administration

Focus DIY, the home improvement chain with 178 stores around the country, has filed an "intention to appoint administrators" Ernst and Young.

So why has it applied to go into administration?

Well, once a "notice of intention to appoint administrators" is made then a moratorium is placed around the company that can protect it from aggressive creditors for 10 days. It is likely, in this case, that a winding up petition has been issued or threatened and it has been used as a tactic to stop the publication of the petition. If the petition was published then the bank would most certainly freeze the company's accounts and the directors would lose control.  Of course if it does go into administration the directors would lose control anyhow.  This would not be the case if they proposed a CVA however.  But it has bought them some time.

Yet again it shows that if a threat of a winding up petition is made then you have to act quickly!

The company posted a pre-tax loss of £21m on turnover down 3% to £490m for the year ending February 21 2010 according to the latest set of filed accounts.  The total debts of the company amounted to some £230m.

Again this shows the pressure some retailers are under from falling consumer spending.

If you are an employee of the Focus DIY then look at our help for employees page

*** Update - Focus DIY could go into administration by lunchtime today

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