Independent furniture retailer Morale Home Furnishings secured over £100,000 of sales after entering administration.
Blair Nimmo and Alistair McAlinden from Interpath Advisory were appointed joint administrators to Morale Home Furnishings UK Limited on 28 February 2024.
Detailed in newly filed documents on Companies House, historically the Glasgow-based company traded positively and saw an initial bounce in trade following the Covid-19 pandemic.
It achieved revenues of £2.3m with profits of £83,000 during the year ended 31 December 2022. However, during 2023 reduced consumer spending meant trade had become difficult.
Moving into 2024, trading and cash flow difficulties intensified due to a combination of reduced levels of instore footfall, intense competition (particularly online with competitors offering a price match to customers), supplier price increases and rising overheads.
Upon the appointment of administrators, three redundancies were made while six employees were retained to assist with the continuing to trade the business as it initiated a closing down sale. Two further employees were made redundant by the end of March. As of 28 March 2024, post-administration sales amounted to £119,000.
Regarding creditors, the company had one secured creditor RBS, which had an overdrawn balance of £126,000 at the date of appointment. There were also sums due under a bounce-back loan amounting to £30,000. Preferential creditors, employee claims and from the HMRC, are owed sums of £5,800 and £47,600 respectively. Administrators said it is uncertain if these claims would be repaid.
Alistair McAlinden, head of Interpath Advisory in Scotland and joint administrator, said: “As consumers continue to tighten their belts as a result of the cost-of-living crisis, retailers of big-ticket items and similar considered purchases continue to come under significant pressure.
“Unfortunately, in the case of Morale, the company has been impacted by customers moving to lower-priced alternatives, including those retailers which predominantly sell online.”
