Manchester-based insolvency practice Lucas Johnson has been appointed administrator to soft furnishings retailer Textiles Direct.
The retailer, which has over 50 stores and employs some 325 people collapsed after a decline in turnover which is down around 20% in the past 12 months.
At its peak Textiles Direct had around 75 stores and employed over 400 members of staff, but this dwindled in recent years as the economic woes hit high street retailers.
The company was originally based in Huyton, Liverpool, but in 2012 relocated to Oldham following a buy out of the founding shareholder, Steve Bentley.
Kevin Lucas, director of Lucas Johnson, said the decline in turnover for Textiles Direct was unprecedented.
He explained: “The pressure on the high street is well known, disposable incomes and discretionary spending have been squeezed much more than anyone could have foreseen, meaning those retailing non-essential items have been hit much harder than expected and, as is common with many retail business, onerous leases and potentially high fixed central overheads mean little can be done to turn a business around outside of administration”.
The company went through a CVA just over two years ago in an attempt to deal with the onerous leases held within its store portfolio by seeking a 90% reduction in rents to transform its loss making stores into profitable ones. Only a handful of the stores subject to the CVA process now remain.
Lucas added: “The business continues to trade during the period of administration and we believe a suitable buyer will be found. I am pleased to have already received several expressions of interest in the business. We have secured the support of a major supplier to ensure sales are maximised during the coming weeks.
“We have unfortunately found it necessary to close five stores immediately and make the staff working in those stores redundant together with a number of redundancies within head office.
“It is inevitable that if a buyer is not found this will be yet another high street retailer disappearing from the retail landscape, but my team and I will be working hard to try and avoid this happening.”
The website associated with Textiles Direct (www.textilesdirect.co.uk) is owned and operated by a separate company and is not subject to any administration proceedings. This continues to operate in the same manner as it did before today.
The appointment comes a week after Lucas Johnson were appointed to handle the administration of law firm Blakemores.