Lombok, the 19-store upmarket furniture retailer, has been bought out of pre-pack administration by a private equity-backed consortium after it became the latest furniture chain to collapse.
The new consortium, led by the turnaround specialists Privet Capital and Paradigm, and Lombok's management team, will take the retailer forward with 14 stores, but will shed 5 outlets. Lombok appointed the accountancy firm KPMG as administrator yesterday.
The deal secures 124 out of 161 jobs at the retailer – and protects the deposits and delivery of all orders placed by customers. Pre-packaged administration allows a company to enter administration and then to be quickly bought by new owners with reduced liabilities. For retailers, this typically enables them to ditch unprofitable stores, a process that has generated anger among landlords.
Founded in 1998, Lombok has suffered during the slump in the housing market, as customers baulked at purchasing its mid-to-high-end furniture and homewares accessories. For the year to 30 June 2008, Lombok's pre-tax profits tumbled by 63 per cent to £232,065.
Over the past year, MFI, Land of Leather, Sofa Workshop, Ilva, The Pier and Rosebys have fallen into administration. This month, Allied Carpets also collapsed shedding 166 out of 217 stores.
Privet Capital and Paradigm have taken a majority stake in Angora (2009), which has the right to trade under Lombok's name. The retailer's previous backer, PI Capital, has exited its investment.
William Landale, who will remain as chief executive of Lombok, said: "Whilst the recession has hit Lombok, as it has many other retailers, we have a great brand with significant opportunity to grow the business in the longer term. The existing management are fully behind the deal and we will now sit down with the new board to execute the strategy for the company."
Lombok's founder Alex Cresswell-Turner will remain at the business focused on product development as creative director. Steve Keating, a partner at Privet Capital and Lombok's newly appointed chairman, said: "It is very much business as usual for Lombok. All existing orders will be fulfilled, day-to-day operations continue as normal, our excellent website remains fully functional and there will be no change to the trading name or store branding."Reuse content