Contract furniture supplier Rosehill has been sold in a pre-pack deal after entering administration.
Craig Johns and Jason Mark Elliott, both of Cowgills Limited, were appointed as joint administrators of Rosehill Furnishings Ltd on 14 February 2024.
In the build up to its collapse, during August 2023 a main supplier of wooden furniture ceased trading and this caused significant supply issues in relation to the church sector. Then in November, another supplier of wooden furniture also ceased trading causing further issues.
This caused long delays to customers while a weakened demand for office furniture, reduced due to the rise in home working following the Covid-19 pandemic, further exacerbated the situation.
Alongside this, its landlord of where the company operates, a leasehold in Stanley Green Business Park, Cheadle, commenced rent arrears recovery action in January 2024 and subsequently meant the business had no access to its trading premises. It is understood a sum of £135,000 is outstanding.
Despite cost-cutting attempts being implemented as well as growing turnover to meet debt obligations, further creditor pressure was applied from the HMRC, understood to be owed around £440,000.
Following a review, it was decided that administration was the appropriate action. This subsequently led to an offer for the business from Rosehill Furnishings Group Limited in the sum of £35,000 after an extended marketing process.
The business was incorporated during June 2023 and has one connected director named under common ownership.
The sale of the business assets and goodwill was completed on 14 February 2024 for the sum stated above. Administrators said that the company’s secured creditor is likely to receive a distribution from the sale. Furthermore, two employees were transferred to the new company, reducing employee claims to around £50,000.
It is expected that creditors will suffer a shortfall of £723,000 in total, with the majority of over £400,000 being owed to the HMRC. Unsecured creditor claims totalled £173,000 and included £50,000 owed to NatWest Bank.
