Staff at flooring retailer to go empty handed

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More than 100 employees at flooring retailer Floors-2-Go, which went into administration this week, will not receive their monthly pay packet tomorrow.

The 97 employees who were made redundant this week, as well as some head office staff in the flooring specialist’s contracts division, which serve corporate customers, have been told they will not get paid, including sales commission, for the last month.

The 132-store chain, which specialises in sales of laminate flooring, is seeking a buyer for the business after it called in Kroll as administrator on Monday evening.

The 97 store redundancies came after Kroll’s joint administrators were forced to close 41 stores.

Floors-2-Go was the victim of torrid trading in the home improvement sector, but some industry experts believe that the trend to spruce up homes with laminate flooring is waning.

A Kroll spokeswoman said: “Unfortunately, employees made redundant upon the appointment of the joint administrators did not receive their final pay for the period prior to the appointment due to cash flow constraints of the business.”

A boss at another restructuring firm said it was standard practice that employees made redundant in an administration only receive the statutory redundancy payment from the government because they effectively become unsecured creditors.

A source close to Floors-2-Go source alleged that at least seven senior managers, who have put their own money into the retailer such as by remortgaging their house, could lose their investment. Kroll declined to comment on this matter.

A private equity firm Alchemy Partners backed the £52.4 million acquisition of Floors-2-Go in December 2006.