Administrators of laminate flooring chain Floors-2-Go are looking for a buyer for the firm after it became a victim of the struggling housing market.
The Birmingham-based group – the UK’s biggest wood and laminate flooring retailer – was forced to call in experts from risk consultants Kroll on Monday evening.
The administrators closed 41 of the group’s 132 stores, including branches in Wolverhampton and Walsall, while axing nearly 100 of the chain’s 450 staff.
Sales have been hit by the depressed housing market.
Kroll partner Fraser Gray said: “Retailers are battling a particularly hostile environment at present, and it is clear the pain is being felt acutely in home improvements.”
But Mr Gray added the business would trade while administrators weighed up the options for the retailer.
“Floors-2-Go has a strong brand, a well-dispersed nationwide network, an established online presence and a contracts division, so despite the harsh conditions, we remain hopeful of selling the business as a going concern,” he said.
Of the company’ stores in the West Midlands, branches are still trading in Bilston, Kidderminster, Dudley, Cannock and Brierley Hill. Five Birmingham outlets are open.
Floors-2-Go began as a family business in Birmingham in 1999. It floated in 2004, evolving from cash and carry-type warehouses to retail superstores in prime high street and retail park locations.
It was bought for £52.4 million in December 2006 by directors and private equity firm Alchemy Partners, headed by entrepreneur Jon Moulton.
The problems faced by Floors-2-Go come against a background of difficult conditions as consumers cut back on home improvements.
According to the British Retail Consortium’s latest retail sales figures, sales of both large and small furniture and homewares weakened further in June despite discounts and promotions. B&Q owner Kingfisher said last month like-for-like sales slumped nearly eight per cent after a “very tough” first quarter.
Home Retail Group, which owns Homebase, saw a 12 per cent fall in like-for-like sales in the 13 weeks to May 31 after March and April’s poor weather.
This year Floors-2-Go announced it was to axe 90 jobs.
The company’s chief executive, Roger McLaughlan said: “The market has been difficult, not only for Floors-2-Go but many of our competitors.
“Despite pushing ahead at pace with our turnaround programme, the wider retail outlook remains challenging and therefore we have taken the decision to reduce costs in order to ensure future profitability.”
Despite that earlier move, it is understood that trading continued to sharply deteriorate, with like for like sales down by around 20 per cent over recent months.
As recently as last month Mr Moulton denied that Floors-2-Go was heading for a financial crunch while dismissing speculation it was planning to bring in a restructuring firm to help it through tough trading conditions.