Har­veys is lat­est high street ca­su­alty as it calls in ad­min­is­tra­tors

The Daily Telegraph - Business - - Business - By Laura Onita

FUR­NI­TURE re­tailer Har­veys has col­lapsed into ad­min­is­tra­tion as the high street fights to re­cover from lock­down.

Ad­min­is­tra­tors at PwC will try to find a buyer for Har­veys in the in­sol­vency process. At least 240 jobs will be lost, with hun­dreds more in dan­ger.

The com­pany’s sis­ter busi­ness Ben­sons for Beds also called in ad­min­is­tra­tors but was im­me­di­ately bought back by its owner through a so-called prepack res­cue deal where it is shorn of debts. Re­struc­tur­ing com­pany Al­teri has run the two chains since Novem­ber af­ter tak­ing them over from strug­gling South African re­tailer Stein­hoff. It plans keep up to 175 stores out of 262 sites in to­tal.

The sale of Ben­sons has pre­served about 1,900 jobs, but 1,330 are still at risk if PwC fails to sell Har­veys.

Gavin Ge­orge, the boss of Al­teri, said he had spent some time ex­am­in­ing both re­tail­ers since Christ­mas.

He said: “We con­cluded that only Ben­sons has the po­ten­tial to be a strong busi­ness go­ing for­ward, which is why we had to go through the [ad­min­is­tra­tion] process.

“The chal­lenges in the sec­tor go back a while and Covid has ex­ac­er­bated those is­sues. Ben­sons can’t suc­ceed if it car­ries its un­der­per­form­ing sis­ter.”

Al­tari is in­ject­ing an­other £25m into Ben­sons to speed up its re­cov­ery.

Mr Ge­orge in­sisted that all or­ders will be ful­filled, with most man­age­ment stay­ing on.

Ben­sons for Beds was founded in the Fifties and is the UK’s sec­ond largest bed re­tailer af­ter ri­val Dreams. The busi­ness also has a man­u­fac­tur­ing di­vi­sion that sells to other high street names.

Har­veys’ ad­min­is­tra­tion is the lat­est in a se­ries of col­lapses and re­struc­tur­ings, with Oak Fur­ni­ture­land, Laura Ash­ley and Cath Kid­ston al­ready go­ing un­der.

Mark Jack­son, chief ex­ec­u­tive of Ben­sons, said: “While this is a dif­fi­cult day, say­ing good­bye to loyal col­leagues across the group, the re­struc­tur­ing will al­low Ben­sons to emerge as a leaner and fit­ter busi­ness.”

Zelf Hus­sain, joint ad­min­is­tra­tor at PwC, said: “The group had been fac­ing in­creas­ingly chal­leng­ing trad­ing con­di­tions in re­cent months, in par­tic­u­lar the fur­ni­ture busi­ness. This has re­sulted in cash flow 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.”

The busi­ness made sales of £500m last year.

Re­tail an­a­lysts pre­dict that Har­veys’ demise will be a boon for ri­vals such as DFS, which will pick up the ex­tra busi­ness, al­beit there is not a lot of pent-up de­mand cur­rently.

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