‘Unforeseen circumstances’ led to Rowico administration

The loss of a major customer and change in profitability put furniture supplier Rowico into administration.

Paul Wood and Simon Haskew, both of Begbies Traynor (Central) LLP, were appointed as joint administrators of Rowico UK Ltd on 27 January 2023.

Detailed in newly filed documents on Companies House, administrators said that the business enjoyed profits every year until unforeseen circumstances saw a change in performance. This subsequently led to the director’s being unable to work and included the loss of a major customer that went insolvent. The business had to then rely heavily on its parent company Rowico AB. 

Due to a lack of interest in buying the business as a going concern, the company had no option other than to enter into administration, making all six employees redundant. Two were retained, due to the experience and knowledge of stock, to assist in maximising the value from the company’s stock.

“We incentivised two of the former employees to sell the company’s stock to existing and new customers for the highest value possible as this strategy would allow realisations that would exceed the outcome available from an auction,” administrators said.

At the stage of the filed report, around £357,000 is expected to be realised from assets, mainly from stock valuing £500,000. It is unclear how much the HMRC is owed, while unsecured creditor claims totalled £309,000, with the majority of £244,000 being owed to its parent company. There may also be further large claims from two overseas suppliers. 

Administrators stated that there should be sufficient funds to settle preferential claims as well as making a distribution to unsecured creditors. There is also a shareholder balance of £950,000, which is expected to be unpaid.

A note on its website from administrators currently states: “The company is now on close down and will be sadly closing in April. If you wish to purchase any of the remaining stock, we can still take a few remaining orders.”

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