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Furniture firm calls in administrators
THE future of 850 staff at furniture retailer Land of Leather is in doubt today after the ailing firm called in administrators.
The Kent-based firm has been forced to appoint Deloitte after efforts to secure additional funding and sell the business failed.
The firm said it had taken "all the necessary steps" to ensure customers who have paid deposits for furniture were protected.
Around 20,000 customers are waiting for orders to be fulfilled, Deloitte said.
It added Land of Leather had stopped taking cash deposits from around December 30, but had also set up a separate trust account for deposits not paid by credit card since Boxing Day to protect customer money.
The fund totals around 950,000.
Land of Leather has been crippled by a slump in demand for "big-ticket" goods as consumers come under pressure and house prices tumble.
"The company has made every effort to reduce costs and conserve cash, but market conditions have continued to be difficult and the results from the January sale have been very disappointing," it said today.
It said its funding efforts failed due to the "exceptionally difficult trading conditions and the lack of liquidity in the banking system".
The company is debt-free but was unable to secure working capital to keep the business going.
The group, which has 109 stores, opened its first outlet in 1997 with the aim of bringing affordable leather sofas to the mass market.
Land of Leather floated in 2005 and its shares reached as high as 357p in January 2007 as the property market approached its peak.
But the stock was suspended at less than 3p today - valuing the entire company at just 1.06 million.
The firm was forced to raise 15 million from shareholders last June to keep the business from going under.
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Weather for Yorkshire
Saturday 11 February 2012
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