120 jobs lost as luxury kitchen brand enters administration again

Mereway Kitchens has collapsed into administration nearly five months after the company was rescued in a pre-pack deal. 

Highlight Green Acres, owned by major kitchen retailer Sigma 3, brought the brand in a deal that saved 150 jobs. It began to trade as Mereway Kitchens with plans announced by its Chairman Brian Larkin to “restore stability with a sharp focus on improving service and completeness”.

Now 120 jobs have been lost in Birmingham as the firm’s poor sales volumes left the business unprofitable amid a “weakening market”. A spokesperson for the company also felt the previous administration process affected consumer confidence. 

The partial withdrawal of credit insurance due to a loss spun Mereway Kitchens into administration on August 18. It went down owing £2.8m to trade and unsecured creditors, with administrators at BDO saying they will not receive any of the cash owed to them. 

Now Huw Powell, Paul Wood and Mark Malone, partners at Begbies Traynor have been appointed as administrators and are winding down the business with the assistance of 15 remaining staff. 

A spokesperson for the company said: “Despite substantial investment and significant progress in many areas, it has not been possible for Mereway to achieve the required sales volumes that were needed to make this business profitable.

“The impact of the original business going into administration in 2023 appears to have significantly impacted customer confidence. This, along with a weakening market in the last three months has materially impacted the business. It is therefore with great sadness we have reached the conclusion that there was no viable alternative to this action.”

Huw Powell, joint administrator and partner at Begbies Traynor said: “The trading challenges experienced by the company have been felt by many businesses due to volatile economic factors resulting in falling consumer demand. This created significant cash flow pressures and after concluding that alternative options were not viable, unfortunately the appointment of administrators and decision to cease to trade became necessary.

“It is always disappointing to see a long-established business fail and our thoughts are with the employees, who only recently came through an insolvency process. We are hopeful that the reputation of the skilled workforce at Mereway for delivering high quality products will allow employees to find new employment quickly, and we wish them all the best.”