Home buyers will lose £12m in deposits, administrators warn | Retail business

More than 30,000 buyers collectively owe almost £12million which they will not get back, according to the latest report from administrators to the collapsed furniture seller.

Buyers paid £13.7million in deposits on large items such as sofas, according to documents filed with Companies House late last week. However, less than £1.9 million has been recovered by customers through card chargebacks, which is when credit card providers refund borrowers when purchases go wrong.

The document makes it clear there will not be enough funds to repay the £11.9million owed to customers, who are on a list of unsecured creditors who are among the last to be paid when the money will be recovered from the sale of the company’s remaining assets. The list of unsecured creditors also includes suppliers and certain employees.

Those assets include shares worth almost £19m, which are expected to fetch less than £2m at auction.

Among’s biggest unsecured creditors are Facebook (owed £1.4m), Google (owed around £1.7m) and the operator of the group’s Antwerp warehouse (1.8m £).

However,’s main lender, Silicon Valley Bank, is likely to recover almost all of the £3.8m owed to it, after retailer Next bought the Made brand and database. .com for £3.4million. Most of its employees and HMRC, which owes £3.57million, will also be paid in full.

Directors of PricewaterhouseCoopers (PwC) were appointed to on November 9, completing a reversal of fortunes for the London-based retailer, which was valued at nearly £800million when it went public in June 2021 and heralded as the future of furniture retail.

Its collapse was the latest example of the online retail bubble bursting, after investors who had bet the shift to online shopping during the pandemic would be permanent saw their hopes dashed.

More than 300 people were made redundant when the company went into administration and almost all of the 500 employees at the time are expected to lose their jobs.

Retail experts expect more retailers to slump due to the cost of living crisis, as consumers rein in spending due to rising bills.

It could, however, provide opportunities for large companies ready to take on struggling competitors, according to Erin Brookes, managing director and head of retail for Europe at Alvarez & Marsal, who said Next had struck deals to buy Joules and the brand. out of government indicate further consolidation in the sector.

“There are retailers and brands that have emerged from the pandemic with much weaker balance sheets and have now been hit by declining consumer sentiment alongside any supply disruptions and cost inflation. “, she said. “These still have something to offer, so some of the larger and more robust groups will definitely see opportunities around.”

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