While the stream of retailers entering administration has slowed greatly since the start of the year, largely due to a boost in consumer confidence, the retail industry is by no means out of the woods yet. This has been made startlingly apparent this week with the cessation of trading announced by upmarket furniture retailer Dwell.
The chain, which employs around 300 staff in its 23 branches and one concession, has informed staff that they should not report for work until the appointment of administrators has been confirmed. Most workers are based in London and the South East.
Unfortunately, it is not only staff who are expected to be negatively affected by the cessation of trade, as the brand has been unable to guarantee that existing customer orders will be delivered. Any customers who are currently awaiting orders have been advised to contact their card issuer in the first instance as the company has been forced to close with immediate effect thanks to serious financial issues.
According to a Dwell spokesman, the chain has been seeking financial assistance for some time.
He said; “The business had been working with its advisers, to secure further working capital for the business and was actively in the process of talking to a number of interested parties.
“However, despite this interest, it did not progress.”
In a statement from the company, it confirmed that both its store network and website will no longer be taking orders and that no further deliveries would be made.
While the closure of the chain is certainly unfortunate for customers and staff now left in an uncertain position, it is by no means surprising. Its latest set of results had shown very obvious financial difficulties.
This led to the claim that “consumer confidence is low and trading conditions are challenging within the declining household goods and furniture sector.”
Yet the latest figures from the British Retail Consortium (BRC) have shown a consistently strengthening homeware sector in terms of sales, with furniture and large ticket household goods amongst the top performing categories in the past two months.
Director General Helen Dickinson claimed that consumers are now more willing to spend on more expensive items thanks to the avoidance of a triple dip recession, while stores such as John Lewis have reported a sales boom in furniture – leading industry experts to question why this good fortune did not extend to Dwell.
BBC News Business correspondent Emma Simpson says; “This upmarket retailer looks to have overplayed its hand.
“In the last two years it opened around 11 new stores, almost doubling its store portfolio – but with every new location, there are more costs to bear.
“Sales growth clearly didn’t follow according to expectations and losses started to mount.”
With furniture and homeware sales once again on the up after several difficult years, there could still be a chance of a takeover and salvation of the brand. However, this is likely to be of little comfort to staff and customers left in limbo for the time being.
Do you think there should be more safeguards in place to protect customers and employees in the event of a company administration?
