Dozens of store workers in Tayside and Fife are facing an uncertain future after the Focus DIY chain formally went into administration.
Focus DIY has been in trouble for a number of years now, having been bought by private equity firm Cerberus in 2007 for just £1. The company had been heavily indebted at the time and the new owners agreed to take on Focus’ near £174 million debts.
Two years later, the DIY chain then had to enter a company voluntary agreement to stave off the threat of administration.
Staff at the local branches affected were told by management not to speak to the press, although shoppers in Leven expressed their shock at the news.
One commented, “All the staff seem very pleasant they have a great sense of humour and good customer service so it’s such a shame this has happened.
“I recently purchased some light fittings from the store and when I needed another one I was told that it was discontinued because the supplier had gone bust.
“But the young chap gladly checked up on the computer, found one in the Glenrothes store and arranged to have it sent through here the next day. It’s the little things like that we’ll miss if the shop goes bust, but I suppose it’s happening all over.”
Arbroath councillor David Fairweather said the threat to the Westway Retail Park outlet, coming so quickly after neighbouring Acorn Pets shuts its doors, was a serious blow to the town.
“It just shows what difficult economic times we are sitting in and this can only be bad news for Arbroath. Acorn had something in the region of 78 stores across Great Britain, Focus have 178 and these closures are something that we are seeing more and more across the country.
“Arbroath can’t afford to lose jobs but in the positive side there are a lot of success stories of smaller local businesses that are expanding, so it’s not all doom and gloom. I know that Angus Council will continue to do everything in its power to help these business continue to grow.”
Alan Richardson, chief executive of Dundee and Angus Chamber of Commerce, said, “We are seeing a mixed performance across the retail sector and while some are going from strength to strength others, like Focus, are not doing so well.
“There are still jobs being created and a lot of companies are in a position to take on new staff so we need to make sure there is a balanced approach to this.”
Around 100 jobs are thought to be at risk locally as staff at the retailer’s Leven, Glenrothes, Dunfermline, Forfar and Arbroath branches await their fate, following confirmation of the move by directors.
Employees are understood to have been told it is “business as usual” for the time being as a buyer for the stricken company is sought, although whether that is likely to happen in the current climate remains to be seen.
The administrators of Focus DIY have launched a hunt for a buyer in an attempt to save nearly 4000 jobs across the UK. Ernst & Young, which has been appointed to run the chain, said it hoped to sell the business as a going concern. In the meantime the business will continue to trade as normal, it added.
Joint administrator Simon Allport said Focus DIY had been hit by low consumer confidence and a weak housing market, which had placed considerable pressure on sales and margins. He added that its management had tried to control costs and restructure the business, but had been unable to avoid a collapse.
Potential buyers reportedly include B&Q owner Kingfisher which is understood to be interested in buying some of the properties, and Chris Dawson, founder of furniture and homewares chain The Range.
The chain, which was founded in 1987 and now employs nearly 4000 people across 178 stores in the UK, has been struggling under the burden of its debts in recent years, with the decision to call in the administrators taken after the company defaulted on payments.
Mr Allport said the administrators are seeking offers for the sale of the business as a going concern.
“Low consumer confidence and a very weak housing transaction market has impacted on Focus and placed considerable pressure on sales and margins,” he said. “Despite management’s actions to tightly control costs and restructure the operations, unfortunately it has not been possible for the business to continue to trade outside of insolvency.
“Focus will continue to trade as we look for a buyer for the group and its stores. It is very much business as usual and we are grateful to all the group’s loyal customers, suppliers and employees for their continued support.”
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