BDO administrators look to sell Bathstore as going concern

09 July 2019 Consultancy.uk

Loss-making bathroom specialist Bathstore has appointed administrators, after a gruelling restructuring effort failed to deliver the firm back into profit. Professionals from BDO will now look to sell off the assets of the home improvement company.

Founded in 1990 by Patrick Riley and Nico de Beer, who opened the first shop in Croydon, Bathstore went on to become the UK’s biggest bathroom specialist. Bathstore has 132 stores and 529 staff, 405 of whom are shop workers, while 124 are in the head office in Welwyn Garden City, Hertfordshire.

Despite its size, though, Bathstore has been hit by worsening trading conditions in recent times. It made a pre-tax loss of £22 million in the year to July 31st 2017 with sales of £141 million, according to the last set of results filed with Companies House. The loss reflected exceptional costs of £11 million, including a £5.4 million write-down on the value of its stores and leases. As a result, 2018 saw the company embark on a turnaround plan.

BDO administrators look to sell Bathstore as going concern

Bathstore’s current owner, US billionaire Warren Stephens, also provided a £15 million loan at the end of this restructuring, and extended the maturity of previous loans to the end of next month. However, having already backed a management buyout in 2014, it is understood that Stephens was unwilling to put in even more cash into the business to save it before this June’s rent day.

The loss-making company has subsequently been forced to appoint administrators from consultancy BDO, putting more than 500 jobs at risk. According to BDO, the retailer will continue to trade for now in the hope it could be sold as a going concern, though so far, administrators have not received any offers.

Joint administrator Ryan Grant said, “Despite significant investment into the business over the past five years, Bathstore has struggled to overcome the well-documented challenges facing the UK retail sector. The appointment was made after several months of difficult trading and the failure of on-going talks to find a buyer for the business. Bathstore is continuing to trade in administration while the administrators seek a buyer.”

With the British Retail Consortium stating recently that retail conditions are the toughest in a decade, Bathstore is the latest member of the sector to have succumbed to the high street crunch. Declining consumer spending power due to stagnating wages and rising inflation have led to a flurry of profit warnings, with many stores eventually going out of business or closing stores.

Rival firm Better Bathrooms similarly fell into administration earlier in the year, seeing 325 staff members made redundant. This left 10 head office and warehouse function staff, who were retained on a temporary basis to assist with the sale of the firm’s assets by FRP Advisory.


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