ScS goes into adminstration

Furniture chain ScS Upholstery has been put into adminstration leaving shareholders empty-handed.

The Sunderland-based company said that it was "unlikely" investors would receive a payout for their shares under the rescue deal.

But 1,300 jobs will be saved by the sale of its trading arm to an affiliate of US-based buyout firm Sun Capital Partners, called Parlour Product Holding.

The deal will also see its 96 stores remain open, with administrators confirming it will "business as usual for employees, customers and suppliers".

ScS has been hit by consumers reining in spending on "big ticket" items since last summer's credit crunch, with plummeting sales leaving the group in need of extra funding.

The group has been scrambling to find a deal to boost its working capital and revealed last month that it had received an approach for its sole trading company, A Share & Sons, as part of its efforts to save the group.

It warned at the time that such a sale would result in "negligible value" for the shares of its parent firm ScS Upholstery.

Shares were suspended on the announcement, at just 6.5p - a fraction of their value before the credit crunch hit.

Mike Browne, chairman of ScS, said: "The sale of the ScS Business to Parlour is expected to provide this necessary investment and to protect therefore the ScS Business's employees, trade creditors and customers, as well as helping to secure the future of a number of its suppliers with workforces in the UK and continental Europe.

"The ScS business looks forward to benefiting from the extensive experience of Sun and its affiliates in the retail industry so that it can stabilise and grow its business."

ScS said in May it was set to see an annual loss after revealing worse-than-expected trading over the crucial bank holiday weekend.

The firm had also only two weeks before revealed that an insurer refused to cover five suppliers against the firm being unable to pay them, leaving the group with a sudden large cash requirement.

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