The directors of the beleaguered Focus DIY chain were forced to call in administrators yesterday after it defaulted on a loan repayment. The move put almost 4,000 jobs under threat.
Just months after the company denied it was under pressure, the directors said Focus now had "no alternatives that could be explored any further". In a statement, they said they had "come to the conclusion that to protect the interests of creditors they have no choice but to seek protection through filing a notice of intention to appoint administrators".
Robert Clark, a senior partner at Retail Week Knowledge Bank, said: "It is remarkable this didn't happen five years ago; the company has been defying gravity for a long time.
"Focus didn't have good enough stock, pricing or store locations," Mr Clark said. "They are a poor relation of the majors. Their sales numbers have been appalling."
The company bought Wickes in 2000 in a deal worth £296m, with the merged business becoming the second-largest player in the UK's DIY market. It sold Wickes five years later to Travis Perkins.
It was around that time that the company ran into financial difficulties and was close to breaching its banking covenants. While there were long-running rumours of a takeover approach, Focus – struggling under debts of £280m – was put up for sale by its private equity owners, Apax Partners and Duke Street. They eventually sold out to rival Cerberus for £1.
Cerberus overhauled the group, slashing costs and selling off poorly performing stores. But in 2008, Focus was forced to enter into a company voluntary arrangement with its creditors.
Mr Clark said the chain's long-term survival had looked "increasingly uncertain" from November last year, after Cerberus appointed investment bank Lazard to advise on options.
The group traces its roots back to 1987 when Bill Archer bought Choice DIY, a chain with six stores. The shops were all rebranded Focus DIY in 1988.Reuse content