skip to main content
Find Insight DIY on
* * *

UK DIY News

Focus aims to strike deal with creditors

Ben Marlow

The chief executive of Focus, Britain’s third-largest DIY chain, is considering a company voluntary arrangement (CVA) in an attempt to secure the struggling group’s future.

Bill Grimsey has instructed the KPMG restructuring team to prepare a CVA as part of a review of the business.

Until recently, a CVA was a relatively unknown and little-used legal procedure. It lets companies reduce their debts and interest payments without going into administration – but it requires the consent of at least 75% of creditors. Sports retailer JJB and caravan trader Discover Leisure both recently used CVAs to restructure their businesses.

Grimsey’s advisers have also agreed in principle with the company’s banks to renew a two-year credit facility, which runs out at the end of 2009.

Focus was bought by American private equity firm Cerberus in 2007, which paid £1 for its equity and assumed £225m in debt. The company is understood to be ahead of budgeted sales for the past 12 months.

After predicting a 10% fall in sales in 2009, retail veteran Grimsey, who has previously led Wickes and Iceland, took drastic measures, including cutting the workforce by 700.

He has also reduced supply-chain costs and slashed the product line from 18,000 to 12,000 to create store space and is planning to add a pet-care range to every store. Monthly rental payments have also been agreed with some landlords.

Focus DIY was founded by entrepreneur Bill Archer in 1987. The business made a fortune for Archer but huge debts almost forced its collapse before the Cerberus rescue.

21 June 2009
view more UK DIY News
*

I find the news and articles they publish really useful and enjoy reading their views and commentary on the industry. It's the only source of quality, reliable information on our major customers and it's used regularly by myself and my team.

*
Simon Fleet - Sales & Marketing Director, Thomas Dudley Ltd
Newsletters

Don't miss out on all the latest, breaking news from the DIY industry