Pre-pack administration deal saves more than 50 jobs
A pre-pack administration deal has saved all 53 jobs at a firm founded as a self-funded challenger brand to pioneer the modular “sofa in a box” concept in the UK.
The deal has involved the sale of the business and assets – including the stock, brand, domain names, website and intellectual property – of Snug Shack Limited (Snug) to Snug Furniture Limited, a newly incorporated subsidiary of ScS Group plc (ScS).
The sale was advised on and completed by a team from wealth management and professional services group, Evelyn Partners.
Snug, which has a base in Leeds, was founded in 2018. In the financial year 2021 the company recorded revenues in excess of £30m, up from £7m a year earlier.
But despite big ambitions and growth plans for 2022, Snug was faced with difficult trading conditions against a backdrop of a challenging economic climate.
It was particularly affected by a 700% increase in shipping costs, unfavourable exchange rates, and further effects of the cost of living crisis.
ScS is one of the UK’s largest retailers of upholstered furniture and floorings, with close to 1,900 colleagues working in the UK.
As part of the agreed deal, Snug’s website and its Leeds pop-up store will continue trading as normal.
Colin Hardman, partner at Evelyn Partners and joint administrator of Snug, said: “We are happy to have advised and completed on this sale to ScS, which we consider to be the best outcome for creditors and which preserves 53 jobs, while also maintaining a continuity of trade.
“We thank Snug Shack management for their support in this process. We will be continuing to work with the new owners to ensure a smooth transfer of operations and to minimise any disruption to customers.”
Mark Ford, partner at Evelyn Partners and joint administrator of Snug, added: “We are pleased to rescue this pioneering and much-loved brand and, as well as management, we want to thank all the key stakeholders including staff, the bank and critical suppliers for helping make this happen.”
A statement from Snug’s management explains: “It has been a rollercoaster few years balancing exponential growth with supply chain challenges and growing a team remotely through Covid.
“Snug set out to disrupt the industry with fast and convenient delivery of modular sofas, and this new partnership with ScS supports us in our ambitions to be a leader in the industry.”
Steve Carson, chief executive officer of ScS, said: “Snug is an exciting and young business with great potential. It has a strong and recognisable brand, a differentiated product and targets a market that complements our proposition.
“In that regard, it presents us with an exciting opportunity to further increase market share.
“We therefore view it as a great strategic and cultural fit which reinforces our commitment to helping our customers create the home they love.”
