BDO uses pre-pack to save 400 jobs at Allied Carpets
Dermot Power, Shay Bannon and Graham Newton save 400 jobs after the ailing company was placed into administration, simultaneously selling 51 stores back to management
Administrators from BDO Stoy Hayward have sold troubled Allied Carpets back
to its management in a pre-packaged deal.
Dermot Power, Shay Bannon and Graham Newton used the controversial insolvency
tool to sell on 51 of the carpet giant’s stores and save 400 jobs after being
appointed as joint administrators of AC (UK) Limited and Allied Carpet
Properties Limited last week.
Pre-packaged administrations have attracted
criticism
from politicians and unions, because they claim unsecured creditors such as
suppliers are disadvantaged as companies shed the worst performing parts of the
business and buy back the rest.
But pre-packaged deals are seen by the insolvency community as an invaluable
tool in efforts to preserve companies.
The 51 stores and Allied Carpets’ insurance inspection business were sold to
Allied Carpets Retail Limited, the new business set up by Allied chief executive
Clive Hutchings.
Talks are still continuing with landlords which could see other stores
snapped up by the new company in the next two weeks.
Customer deposits have been safeguarded and outstanding customer orders,
including inspections, will continue to be fulfilled from all stores.
All staff wages, including arrears will be paid on the normal payment dates,
BDO added.
Dermot Power, joint administrator said: ‘Allied Carpets is a well established
brand in the marketplace but like many companies, has suffered because of the
economic climate and difficult trading conditions.
‘The stagnation of the housing market has meant that fewer people are buying
carpets and flooring. We’re pleased to have safeguarded the future of 51 stores
and more than 400 jobs. We are currently working to secure a going concern sale
of the remaining stores in the Allied Carpets portfolio.’
Clive Hutchings, CEO at Allied Carpets Retail Limited and Allied Carpets
Inspections Limited, said: ‘I am pleased that we have secured the future of the
Allied Carpets brand through this sale and have the working capital to provide
continuity and security for our customers and a significant proportion of
staff.’
