£7m-turnover furniture manufacturer falls into administration
Tue, 11 Jul 2023 | ADMINISTRATION
Acclaim Upholstery Company Limited, a major furniture manufacturer based in the East Midlands, has fallen into administration. The company, which is headquartered in Long Eaton, Derbyshire, has appointed Martin Buttriss and Carol Best of Begbies Traynor as joint administrators.
The company reported turnover of slightly more than £7 million in its most recent accounts, for the period covering August 1 2021 to March 31 2022, compared to £10.6 million in the year to July 31 2021. Significantly, however, the company fell from a pre-tax profit of £268,797 to a loss of over £456,000.
In its strategic report for those accounts, the company said that turnover had increased as a result of a large carry over of orders from 2020, resulting from growing demand during COVID-19 lockdowns and production disruptions occurring at the same time.
However, the company’s gross margin was heavily impacted by the rising cost of raw materials, as a result of shortages of key components such as foam, and price inflation. Looking forward at the time, the company stated that: “The raw material situation remains very uncertain into 2022 and we are still experiencing increased pricing and delayed component deliveries, which are now also being impacted by higher energy prices.”
The report stated that a contract the company had with its largest and main customer meant that it could not pass price increases on in good time, leading to the fall in margin and the losses it subsequently incurred.
Despite saying that this situation had been “addressed” and that “increased pricing should see a return to a sustainable margin”, the firm has seemingly been unable to find a solvent solution to its issues. In June, the company filed a notice of intention to appoint administrators, before subsequently appointing representatives from Begbies Traynor this month.
Founded in 1983, Acclaim is a family business manufacturing bespoke handmade upholstery including sofas. The company offers customers control over their choice of fabric, combination of cushion fillings and size of their furniture.
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