3,000 workers face axe at Focus DIY

Pa
Wednesday 25 May 2011 16:54
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Another 3,000 retail jobs are facing the axe today after the administrator for Focus DIY failed to find a buyer for the collapsed business.

Ernst & Young (E&Y) will launch a closing down sale across the estate this weekend as it begins the process of shutting the 123 stores it has failed to sell since its appointment on May 5.

E&Y has so far offloaded 55 shops and is hopeful that more can be sold on a piecemeal basis, but with weak consumer confidence stifling demand it has failed to secure a deal for the whole operation.

The collapse also leaves customers facing uncertainty as some 10,000 orders have yet to be delivered. The administrator said it was dealing with customers on a "case-by-case" basis.

E&Y, which has been trading the business as normal since its appointment, said some stores could remain open for several weeks while stock is sold.

The administrator safeguarded 556 jobs after it sold 11 stores to discount homewares chain B&M Bargains and 13 stores to Wickes owner Travis Perkins. Both retailers agreed to offer jobs to staff working in the stores.

Several hundred workers at 31 stores bought by B&Q owner Kingfisher will have to reapply for their jobs when the stores are converted later this year.

A total of 3,264 staff currently face redundancy, including those who were working at stores bought by Kingfisher, although some posts may still be saved if E&Y manages to sell additional properties.

Another 100 employees at the company's Crewe head office have already lost their jobs.

A team is dealing with demands for outstanding customer orders and those that have paid by credit card may be eligible to receive a refund through their insurance policy. Customers can call 0800 436 436 or 01270 503454.

Focus fell into administration earlier this month after it was hit by low consumer confidence and a weak housing market, which affected sales and margins. It has struggled in recent years against tough competition from rivals B&Q and Wickes.

Joint administrator Simon Allport said: "UK retailers are facing one of the most challenging retail environments in recent times and the DIY sector has become highly competitive, with only the strongest players being able to thrive and survive."

The company was founded by Bill Archer and a business partner in 1987, with six stores in the Midlands and the North of England. It grew through a number of acquisitions, including Do It All in 1998 and Great Mills in 2000, before rebranding to Focus.

Private equity firm Cerberus bought Focus in 2007. It is understood to have paid just £1 but said it would invest in the company and pay off its £174 million of debts.

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