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Retailer Dwell under the spotlight 12 June 2013

Furniture chain Dwell is in the spotlight today amid rumours that Duff & Phelps may be called in to assist the firm.

Reports suggest that the embattled retailer – which currently operates 24 stores – has been seeking a buyer after Argyll Partners was hired last month to identify possible suitors.

Industry title Retail Week reported that potential buyers may include founder Aamir Ahmad and restructurers GA Europe potentially through a pre-pack administration process.

Dwell Retail Limited was established in 2002 and losses for the three years to January 2012 were £5.6 million. Independent analysts at Company Watch put the negative working capital at £5.6 million as of January 2012 with a negative net worth (assets minus liabilities) of £4.7 million.

Nick Hood, head of external affairs for Company Watch said the company has been under the spotlight for quite some time.

He explained: “Dwell has been on few pundits’ radar as a potential retail casualty, but equally it seems to have had problems in attracting the attention of sufficient customers to generate the cash.”

Hoods says it has also had issues with making the profits needed to support an over-leveraged, ‘unsustainable’ financial model which has left it with an insolvent balance sheet and negative working capital for the past three years.

He added: “Operating in a particularly cut-throat retail sub-sector with such frail financial resources is always going to be a long odds bet.”

Dwell Retail Holdings Limited was established in July 2010 and has been loss making from the start. Its accounts filed in January 2012 show negative working capital of £3 million and negative net worth of £1 million.

 

 

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