Allied Carpets, the UK's second biggest flooring retailer, collapsed into administration yesterday, putting more than 1,100 jobs at risk as the depressed housing market claimed another high-street name.
Some 51 of the company's 217 shops were immediately sold to Allied Carpets Retail Limited by the administrators BDO Stoy Hayward, as was the group's insurance inspection business. The move will protect more than 400 jobs, the administrators said yesterday, and the aim will be to sell on the remaining stores as going concerns over the coming weeks.
All staff wages, customer deposits and outstanding orders from any of the chain's shops are safe, the administrator said.
Allied Carpets joins a list of well-known furnishing chains to be devastated by the downturn, with some retailers reporting double-digit declines in sales. The furniture giant MFI collapsed in November last year. Then rival Land of Leather followed suit in January. And Carpetright, Allied Carpet's biggest competitor, saw pre-tax profits plummet by 72 per cent in the year to May as sales dropped by 13 per cent.
Dermot Power, a restructuring partner at BDO Stoy Hayward, said: "Allied Carpets is a well established brand in the marketplace but, like many companies, has suffered because of the economic climate and difficult trading conditions. The stagnation of the housing market has meant that fewer people are buying carpets and flooring."
A struggling Allied Carpets was bought by Sigma Capital Investment, an offshore vehicle of the retail debt specialist Hilco, in March, just a day ahead of the second-quarter rent day and an expected £8m bill. The group's French owner, Tapis Saint-Maclou, put the company up for sale before Christmas and is understood to have pumped in £15m of working capital in the run-up to the sale. Tapis Saint-Maclou, which is controlled by the Mulliez family, bought, and delisted, the chain in 1999 for £84.2m. It is understood to have run up losses of more than £40m in the following 10 years.
Clive Hutchings, the chief executive of Allied Carpets Retail Limited, said: "Allied Carpets is a good business, and through this sale and additional funding, both the retail and inspections businesses now have the opportunity to strengthen their respective market positions, build on the Allied brand and ensure an ongoing commitment to unrivalled customer service."