Kitchen manufacturer enters administration and ceases trading

A Birmingham-based manufacturer of kitchens and bedrooms has fallen into administration and ceased trading, less than a year after being acquired out of administration. Highlight Green Acres Limited, which traded as Mereway Kitchens, has struggled with cashflow issues resulting from headwinds including falling demand.

Mereway Kitchens had endured several years of challenging trading conditions before ultimately falling into administration in August 2023. Later that month, the business and assets were acquired by Highlight Green Acres, a subsidiary of Sigma 3 Group.

At the time, Sigma 3 Group Chairman Brian Lakin said that the company was considering investment plans for the business and was seeking “to restore stability with a sharp focus on improving service and completeness [as well as] reinstating best practices to facilitate future expansion as we are committed to the firm's long-term strategic success and prosperity."

However, a company spokesperson has stated that: "Despite substantial investment and significant progress in many areas, it has not been possible for Mereway to achieve the required sales volumes that were needed to make this business profitable.”

The spokesperson added that the company’s initial administration last year “appears to have significantly impacted customer confidence”, while the business was further impacted by “a weakening market in the last three months”, leaving no viable alternative than to place the company into administration again.

Begbies Traynor partners Huw Powell, Paul Wood and Mark Malone were appointed as joint administrators to the company in late January. The firm has now ceased trading, with 120 staff made redundant and 15 retained to assist administrators in winding down the business.

Joint administrator Huw Powell commented: "It is a difficult time for everyone involved with Mereway Kitchens. The trading challenges experienced by the company have been felt by many businesses due to volatile economic factors resulting in falling consumer demand.”

"This created significant cash flow pressures and after concluding that alternative options were not viable, unfortunately the appointment of administrators and decision to cease to trade became necessary.”

In Mereway Kitchens' accounts for the year to December 31 2021, its turnover stood at £18.8 million and post-tax profits at £174,722. At the time, the firm's net assets were valued at £1.3 million.


Find out more about UK companies that have fallen into administration over the past week

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