Furnishings fabrics business owes £2m to creditors

Upholstery and furnishings fabrics business Blendworth International Limited experienced a sudden order loss that led to its administration.

Jeremy Woodside and Frank Ofonagoro, both of Quantuma Advisory, were appointed as joint administrators of Blendworth International Limited and Blendworth Holdings Limited on 1 December 2022.

Detailed in newly filed documents on Companies House, the Rochdale-based business had secured a Personal Protective Equipment (PPE) order to supply equipment to the NHS during the Covid-19 pandemic. This contract was won back in May 2020 and allowed the business to continue to trade, maintaining turnover of c.£2m.

Due to demand, the company secured additional contracts of similar nature to produce PPE for over five years. In order to meet this demand, the business invested significantly in new machinery and tooling, financed with third party lenders, while in addition, during February 2021, entering into an invoice finance agreement with Ultimate. Further funding was also secured via a CBILS loan.

During September 2021, the business started to trade again with its usual fabric orders while also continuing with PPE production. However, a month later, the PPE contract was terminated earlier than expected. The business was beginning to be impacted by loan repayments following the investment, coupled with declining demand of fabric production for the level of machinery in operation.

In February 2022, Blendworth did secure a contract to produce products for the Military of Defence (MOD) but encountered several issues and disputes on payment terms. These issues subsequently affected the fabric production side of the business as the company struggled to pay for supplies. By late 2022, the company’s working capital facility was overpaid and no further funding was available with no other option than to enter administration.

Turnover fell to £1.2m for the period from 31 December 2021 to 31 May 2022, while EBIT dropped to a loss of £65,000 from profits that once stood at over £200,000.

Upon appointment, administrators made its 19 employees redundant and conducted a marketing process to sell the business and assets, either as a whole or on a piece meal basis. According to Blendworth’s website, two newco’s Blendworth Bespoke Interiors Limited and Blendworth Interiors Limited, both of which were incorporated during December 2022, are listed. However, there has been no confirmation on any asset sale at this stage. The report did state that two of Blendworth’s trademarks have been sold for a total of £8,000. It did not disclose who acquired the trademarks.

As for creditors, administrators are not able to determine an estimated outcome statement for creditors due to the uncertainty about asset realisations that have a book value of £3.6m. Creditors include £441,000 owed to Ultimate and £301,000 owed to Amicus, £459,000 owed to the HMRC and £679,000 to unsecured creditors, with claims totalling just over £2.1m.

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