MADE administrators provide update; 60% of UK stock sold

Administrators of former online furniture retailer has shared an update on its progress since being appointed back in November last year.

Zelf Hussain, Peter Dickens and Rachael Wilkinson of PricewaterhouseCoopers LLP (PwC) were appointed as joint administrators of Design Ltd on 8 November 2022.

In an update on progress, covering the period from appointment to 7 May 2023, administrators confirmed that secured creditor Silicon Valley Bank, owed £3.8m, has already been repaid to the sum of £2.5m, with the remaining balance to be paid back in around 1-2 months.

Preferential claims, made up of mainly employee redundancy claims, were estimated to be around £871,000. This sum is now anticipated to be lower, and will be repaid in full over the next 3-6 months once claims have been finalised. In the period, a number of employees made claims to the Employment Tribunal for a Protective Award in relation to insufficient collective consultancy regarding their redundancy. These claims are classed as unsecured claims, administrators said.

The second preferential claim is from the HMRC, which is around £2.6m, although administrators are yet to receive anything from the HMRC. Based on current knowledge, it is expected that the HMRC will receive full repayment in around 3-6 months depending on information received. As for unsecured creditor claims, owed £168.9m, administrators now expect that they will get a dividend of up to 1.6%.

In relation to the sale of UK stock, which was estimated to worth around £12.5m, Nottingham-based auctioneer John Pye was appointed to auction the products. This commenced from 21 November 2022 and has so far generated sales of £5.5m, representing around 60% of MADE stock at the time of the report. Administrators said it expects that the remaining stock will be sold in the next 2-3 months. John Pye receives a 20% commission on sales and does not charge any storage fees while the stock is at its warehouses.

Meanwhile, the Trouva (Streethub) online business was listed for sale after being carved out of MADE’s assets due to the company only acquiring the platform four months prior of entering administration. Detailed in the updated report, administrators secured the sale of Trouva for £350,000 to Cambridge-based startup Re:store.

As for customers, those with outstanding and unfulfilled orders were previously advised to make a refund claim by 25 November 2022 if products do not arrive by that date. At the date of administration, around 4,500 orders in the UK and Europe were already within the delivery network with many logistics service providers agreeing to continue to support the delivery of products, which resulted in “many orders delivered post appointment”.

However, administrators said if customers have not received their order, it confirmed that it will remain that way. “If you did not receive your order, we can confirm that unfortunately we have been unable to ship it to you and your order will not be delivered,” administrators said. These customers are now classed as unsecured creditors and are encouraged to submit a claim into the administration.

To date, administrators have incurred costs of £5.9m, with a further £1.3m expected, bringing an estimated total of around £7.2m. Following the appointment, MADE assets were sold to retailer Next for a sum of £3.4m and included MADE’s IP, brand and database. It was completed on the 8 November 2022.

Save this article for later

You can revisit this article if you save it as favourite news!

Leave a Comment