Administration looms for ailing Focus DIY
TROUBLED North West retailer Focus DIY will go into administration today after breaching its banking covenants and failing to agree a rescue deal.
The debt-ridden Crewe-based chain, which went through a CVA process in 2009, said in a brief statement it intends to appoint Ernst & Young, after exploring all alternatives.
The statement said: “Following notification of an event of default under the senior credit facility, and a realisation that there were no alternatives that could be explored any further, Focus directors have 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.
“The directors have sought consent from the business’s lenders to appoint E&Y as the administrators. All stakeholders including staff are being informed.”
Focus, led by chairman Bill Grimsey, is currently owned by US fund Cerebus. Prior to this latest development the company was said to be in talks over a rescue deal with GA Capital.
Focus, which has 180 stores nationwide, made a loss of £21m on sales of nearly £490m in the year to February 21, 2010. According to accounts filed at Companies House, it has bank loans and overdrafts amounting to some £230m. The group employs around 4,300 staff.
Simon Allport and Tom Jack partners at Ernst & Young’s Manchester office will handle the matter when the legal formalities are completed.
Focus was founded in 1987 when former Crown Paints executive Bill Archer set up a DIY business with £300,000 from remortgaging his home.
