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Homeform failed with debts of 84m

Homeform Group, the Manchester-based kitchens, bathroom and bedrooms firm, which went into administration in July, left behind debts of more than £84m, a report revealed.

The loss-making company - which was owned by private equity firm Sun Capital Europe, owed trade creditors £13.4m and HMRC more than £5m, a report filed at Companies House by administrators Deloitte, reveals.

The firm had also taken some £1.8m from customers as deposits for home improvements, and they will not get their money back.

While the group's bankers Barclays is, as secured creditor, likely to get back £5m it was owed, Sun Capital is looking at a hot of around £54m on the £62m it had invested in the business.

Soon after the appointment of the administrators a business controlled by Sun acquired Homeform's Sharps Bedrooms brand - which saved more than 500 jobs, though a deal to also take Kitchens Direct could not be agreed.

Around £7.5m will be paid, in stages for Sharps, with just £2m being paid up front.

Deloitte is still trying to sell the Kitchens Direct, Dolphin and Moben brands.

Homeform's insolvency followed years of losses and coincided by a severe downturn in trading as cash strapped consumer stopped spending as much on big-ticket items such as new kitchens and bathrooms. Around 600 people have lost their jobs including all at the firm's Manchester HQ in Old Trafford.

Source : Chris Barry - The Business Desk

22 August 2011
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