Kitchen manufacturer Mereway enters administration again

Kitchen manufacturing specialist Mereway Kitchens entered administration for the second time in almost five months.

Huw Powell, Paul Wood and Mark Malone, partners at Begbies Traynor, were appointed as joint administrators of Highlight Green Acres Limited on 25 January 2024.

Following the appointment, around 120 jobs have been impacted with administrators winding down the business with the assistance of 15 remaining staff.

Mereway first entered administration in August 2023 after the company suffered a downturn in sales volumes, which, coupled with rising material costs and the impact of Covid, resulted in the business’ collapse.

Upon appointment of BDO, the joint administrators completed a sale of the business to Highlight Green Acres Limited, which was incorporated on 10 August 2023 and is owned by parent company Sigma 3 Group Limited, for a sum of £530,604.

The second administration is understood to be a result of poor sales volumes, which left the company in an unprofitable position, with the “weakening market” and impact of the previous collapse affected consumer confidence.

A statement said: “Substantial investment and significant progress was made achieving approximately break-even trading during October and November 2023. However, Mereway has suffered from falling consumer demand as a result of economic factors and has been unable to maintain the required sales volumes needed to make the business profitable.

“Although alternative options were explored, the resultant trading losses and cash flow impact left the business with no option than to cease to trade.

“Options for sale of the business were explored but given the timelines available and the position of the business this was not possible. As the Company has ceased to trade and completing work in progress is not considered viable, the Joint Administrators do not propose to proactively market the Company’s business or seek discussions with interested parties as the prospect of any sale is considered highly speculative.

“Unfortunately, the Company has ceased to trade and completing work in progress is not considered viable, so no further orders will be fulfilled.”

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