A Tyneside kitchens and home improvement business has been sold out of administration to its sister company in a move that has protected 77 jobs.
The £20m turnover Kitchens Plus Ltd called in administrators at Leonard Curtis earlier this month having run into difficulties brought on by inflation and drop off of customers. In what was said to be a "happy ending" for the firm's management and staff, the company was sold for an undisclosed sum to Windows Plus Roofs Ltd which has a mutual director in Steve Akers.
Joint administrators Iain Nairn and Rochelle Schofield said Kitchens Plus had encountered financial difficulties as a result of what it called the current economic climate, including inflation and the pressure it placed on cost of finance for the firm's customers. The firm operates from a Team Valley base as well as five showrooms around the region, including sites in Gateshead, Durham, Hexham and Monkseaton.
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Latest accounts filed at Companies House - for the year to the end of April 2021 - show gross profit margin had increased to nearly 33% and operating profits had nearly doubled to £1.63m. In a report accompanying those accounts Mr Akers wrote that Kitchens Plus had benefited from increased demand for home improvements brought on by people staying at home during the pandemic. He also said the firm had renegotiated terms with suppliers and implemented controls to improve margins.
At the time, Mr Akers added: "As the market continues to be buoyant and there is clear signs that supply chain problems are lessening, the directors are confident that the business will continue to grow turnover and remain profitable. The management of the business and the execution of the company's strategy are subject to a number of risks. The board reviews these risks and puts in place policies to mitigate them."
Ian Nairn said: "We are delighted with the positive outcome for the company’s management team and workforce in the North East region. The sale achieved represents the best outcome for the Company’s creditors as a whole, minimising the effect on consumers and has resulted in the successful transfer of all jobs to the purchaser.”
The sale was completed with support from St James Square Law and Cerberus Asset Management.
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