A Fife furniture retailer has said it will honour existing orders as it entered administration.
More than 1,000 jobs are at risk UK-wide as the Blue Group, which owns furniture firm Harveys and Bensons for Beds, said cash flow pressures meant it was no longer able to trade.
Harveys and Bensons for Bed stores are located at Fife Central Retail Park in Kirkcaldy, and Dunfermline’s Halbeath Road.
Administrators PwC immediately sold certain parts of the group back to its existing owner. The new group will trade as Bensons for Beds only, which PwC said will preserve 1,899 jobs.
Harveys will continue to trade in administration, with 1,330 employees at risk of losing their jobs, but who have currently been retained to support this trading period. 240 staff have been made redundant so far.
PwC said the purchasers will honour any open orders placed before 30 June 2020, including those relating to the Harveys business.
Between 150 and 175 of Bensons’ stores are expected to remain open under its revamped ownership, meaning that roughly 50 will close permanently following the deal.
Which ones will remain open is still to be determined.
Zelf Hussain, joint administrator and PwC Deals partner, said: “The group had been facing increasingly challenging trading conditions in recent months, in particular the Harveys furniture business.
“This has resulted in cash flow pressures, exacerbated by the effects of coronavirus on the supply chain and customer sales. It has not been possible to secure further investment to continue to trade the group in its current form.
“Following our appointment, we immediately completed a sales process for certain business and assets of the group.
“This sale puts the ongoing business on a firmer financial footing in its restructured form as Bensons for Beds only model, whilst preserving 1,899 jobs.
“The purchasers will be working with the existing management team to continue to grow and develop the business.
“The Harveys furniture related retail and manufacturing businesses will continue to trade in administration whilst all options are explored. 1,330 employees have been retained to support this trading period.
“It was regrettably necessary to make 240 employees redundant due to the economic position of the group. We will make every effort to help those affected at this difficult time by liaising with the Redundancy Payments Service and Job Centre Plus.”
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