Online lighting and furnishings retailer sold in prepack deal

Online retailer and manufacturer of lighting, furnishing accessories and hardware, Dowsing & Reynolds, was sold under a prepack deal after being placed into administration.

Andrew Ryder, of JT Maxwell Limited, was appointed as administrator of Dowsing & Reynolds Limited on 19 June 2024.

Detailed in newly filed documents on Companies House, the company suffered a decline in sales following Covid-19 due to weakened demand. Despite this, the company was still operating at a profit and expected future growth.

However, due to its rapid growth during the pandemic, the business invested in new systems and appointed a new accountant to track sales performance more accurately. It was discovered that the company was not as profitable as initially thought and that sales were also lower.

The business looked to restructure, making a number of employees redundant and securing an agreement with the HMRC over repaying debts.

Despite these efforts, the business was deemed as not viable to continue to trade under its current model and was placed into administration.

Upon appointment of administrators, the business was sold in a prepack deal to connected party newco, Dowsing and Reynolds Home Limited, which was incorporated on 1 May 2024.

The agreed sum totalled £120,000, with £12,000 paid upfront and a further 10 monthly instalments of £12,000 until the balance is settled. Stock valued £75,000 of the sale.

As for creditors, Barclays Bank hold a charge worth £86,000 over the business and received the first instalment following the sale. Another fixed charge holder is Y&H Debt, owed £217,000. As for unsecured creditor claims, these totalled £1.1m. It is expected that creditors will suffer a shortfall of £1.3m.

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