Luxury furniture store Dwell collapses
Furniture retailer Dwell has collapsed with the closure of 23 stores and the loss of 300 jobs after attempts to sell it failed.
The Milton Keynes based firm said no deliveries will be made and customers with outstanding orders should contact their bank or credit card company.
The firm has asked all staff to remain at home as it prepares to appoint administrators. It becomes the seventh major casualty on the high street this year following the collapse of big name brands including HMW, Comet and Jessops.
Dwell started trading from a single store in Balham, south London, in 2003 and expanded in the south of England. In recent years it has opened stores in Birmingham, Manchester and Glasgow.
But the upmarket retailer, majority owned by private equity firm Key Capital Partners, has struggled amid sluggish consumer confidence and a weak housing market.
The company warned in its latest set of results that the ‘current economic situation is uncertain, consumer confidence is low and trading conditions are challenging within the declining household goods and furniture sector’.
It slumped to pre-tax losses of £1.7million in the year to the end of January 2012 on turnover of £34.5million, as losses deepened from £440,000 a year earlier.
In a statement released today the company 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 who saw the value of the Dwell brand and product, its customer base and its multi-channel proposition.
‘However, despite this interest it did not progress. As a result we have been left with no option but to close the business with immediate effect,’ the statement continued.
Dwell is reported to be close to appointing Duff & Phelps as administrator and its website has been taken offline. A spokeswoman said it is too soon to say what will happen to jobs.
The announcement came as official figures showed retail sales increase by 2.1 per cent last month, far higher than economists’ hopes for a 0.8 per cent increase and rebounding from an unseasonably cold April.
The figures will fuel hopes that GDP can grow by 0.5 per cent in the second quarter – consolidating the recovery which began in the first quarter when GDP growth of 0.3 per cent prevented the UK from falling into a ‘triple dip’ recession.
Shoppers bought the biggest quantity and value of retail goods on record, too, with sales up 1.9 per cent compared with May 2012.
This is ‘further evidence that a recovery in the UK economy may be taking root,’ said Martin Beck, UK economist at Capital Economics.
But Alan Clarke of Scotiabank, warned the sales amount to a food binge’ in May.
‘This volatility in retail sales is all about food,’ he said. ‘Either there was a big influence from the poor weather, the timing of Easter caused some distortions, or the whole country was on a crash diet in April that was then reversed in May.’