The market for home furnishings is highly competitive. An explosion of satellite and terrestrial TV make-over programmes, endorsed by such celebrities as Kirstie Allsop, urging us to express the inner love for our homes is helping to drive product sales, but competition is fierce.
In the UK, the market has grown. But only just. The UK market for home furnishings was estimated to be worth £3.56bn in 2010, an increase of 0.6% on its value in 2009 according to a recent Keynote report. It predicted a similar increase to the end of 2011.
The climate is tough for a variety of reasons: the increase in value-added tax (VAT) to 20% in early 2011, coupled with increased job insecurity and low consumer confidence, are clearly having an impact. Discretionary spend for the more ‘luxury’ items has fallen, and the slump in house sales has also had an effect.
Even in good times, a business can struggle if it fails to manage its cashflow effectively. But when times are tough – and they are certainly tough in the home furnishings sector – poor cashflow management is quickly exposed.
Go Creative Products Limited – a Leicestershire-based supplier of bathroom accessories and home décor products to UK retailers – was certainly one such company that took its eye of the proverbial cashflow ball, racking up debts of some £800,000 before it was obliged to call in the Administrators. This was a huge sum on a turnover of only £6 million.
Happily for them, the team that was appointed – SFP’s Daniel and Simon Plant – both licensed members of the Insolvency Practitioners’ Association – were swift to recgonise that Go could be saved as a viable business.
Appointed on 10th February 2012, within days a purchaser for the business and its assets had been found as Simon explains: “Go Creative Products works with a number of leading high street retailers, among them House of Fraser and Wilkinsons.
“It wasn’t the product or the channels to market that were the problem, but rather the financial management, and now with a new team on board, there is every reason that the firm and its 13 employees should have a bright future.”