The following article was published on 22nd February 2018.
Designer Ideas Limited, the award-winning ethical bedmaker known as Warren Evans called in the administrators on 6 February in spite of strong Christmas sales. The London bed and furniture manufacturer has 14 showrooms across the Capital and the South-East of England and a manufacturing site in Walthamstow, North-East London.
The company was founded in 1978 by Texas-born Warren Evans Adams who was 17 years old. The furniture maker opened his first showroom in 1985 and expanded the business steadily by gradually building a reputation as a green and ethical furniture maker. The company only uses wood from sustainable sources and boasts a biomass boiler in its workshop that uses timber offcuts as fuel, which cuts down on landfill waste.
Warren Evans, which is headquartered in Camden, North London, reported pre-tax profits of £837,500 on sales of £27.3m last year and had been seeking investment since November 2017.
Initially, the administrators were seeking a buyer, with the aim of securing a sale by the end of March. Warren Evans Adams had made claims that were a number of offers on the table. However, the administrators said the search proved “ultimately unsuccessful” and the showrooms have been closed and all staff made redundant.
New London Showrooms Funded by Bonds
In 2013 the retailer issued £2.5m of retail bonds to fund the opening of new showrooms. Some £2 million of the bonds, with an interest rate of 7.5% is thought to be outstanding. This may have complicated the sales process, according to trade publication Retail Gazette, as potential buyers will have been looking to buy a debt-free company, especially in the struggling furniture sector.
In a statement, the administrators said: “Over the past year the business has been growing its market share with major investments in new product development. However, the search for a new investment partner has proved to be ultimately unsuccessful, and so the business and management were left with no option but to go into administration.
“Trading conditions are exceptionally challenging with the business hit by rising manufacturing costs and the continued squeeze on consumer wallets and confidence,” they added.
London Retail Sector
Analysts have predicted a raft of retail administrations this year as businesses face unprecedented costs pressures and a significant change in consumer spending habits. Faced with stagnant wages and growing inflation, consumer purchases of larger items, such as furniture have been some of the hardest hit.
Warren Evans is the latest in a line of furniture retailers to go bust as smaller struggling firms collapse under the pressure of weaker consumer spending. Last year there was a significant amount of consolidation within the furniture sector, with DFS acquiring rivals Sofology and Dwell as well as eight stores from Multiyork, which filed for administration in November. Swedish group Hilding Anders has also struck a rescue deal for beleaguered Feather & Black.