Harveys is latest high street casualty as it calls in administrators
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.