Furnishings group Giomani Designs acquired collapsed garden furniture retailer Moda Furnishings for almost £2m in a rescue deal that saved over 70 jobs.
Sam Woodward and Tim Vance, both of Ernst & Young LLP, were appointed as joint administrators of Moda Furnishings Ltd on 14 July 2023.
Ahead of entering administration, Moda saw sales boom during the pandemic and subsequent lockdowns, with revenues rising 41% to £33.5m and pre-tax profit resulting at £5.8m for the year ended 31 October 2021.
In the period since reporting, Moda said demand softened due to the cost-of-living crisis, high levels of competition and increased costs, with sales for FY22 at £21.4m. Trade continued to be impacted by weak consumer confidence and as such, the forecast for Winter 23/24 cash shortfall was accelerated.
The company tried to secure additional support but financial stakeholders were unable to offer long term support with the decision to place the business into administration.
A sale process saw 91 parties contacted which resulted in 29 expressing an interest. Following the appointment, the business and certain assets was sold to Giomani Designs Limited for a sum of £1.65m, upgrading from an initial bid of £1.5m, saving all 75 jobs with the company continuing to trade under the new ownership.
As part of the deal, Giomani Designs, which also trades as online beds retailer Beds.co.uk and more recently online homewares retailer Cox + Cox, has acquired Moda’s head office and six showrooms, which are located in Manchester, Caterham, Chelmsford, Cheltenham, Milton Keynes and a pop-up in Leeds.
With regards to creditors, preferential claims stood at £11.2m, while unsecured creditors are owed £5.5m, with creditors expected to suffer a total shortfall of £16.8m.
A statement from administrators confirmed: “On 14 July 2023, the Moda entered administration and Sam Woodward and Tim Vance, partners of EY Parthenon’s Turnaround and Restructuring team, were appointed as joint administrators. The appointment was made by the Company’s directors in accordance with Paragraph 22(2) of Schedule B1 to the Insolvency Act 1986.
“Shortly following their appointment, the Joint Administrators completed a sale of the business and certain assets of the Company to Giomani Designs Limited and the business is continuing to trade under new ownership.”
Commenting on the acquisition, Giomani Designs said in a short statement: “Moda is a well-established retailer with a strong brand and market-leading product. We are pleased to be investing in the future of the business and look forward to welcoming Moda’s employees into the Giomani group.”