Suppliers await credit fallout as Focus DIY chain fails

Suppliers are counting the potential cost of Focus going into administration.

The retailer claimed not to have deviated on payment days with suppliers but had minimal credit insurance. Suppliers provided up to £5m of product each to the group a year.

The DIY/garden centre chain, which is majority-owned by private equity firm Cerberus, said it was seeking consent from its lenders to appoint Ernst & Young as administrators.

"Following notification of an event of default under the senior credit facility, Focus directors have no choice but to file a notice of intention to appoint administrators," the company said.

Focus DIY employs 3,919 people at 178 stores. The company declined to comment.

B&Q has bought 31 stores from Focus DIY for £23m that will close in July and reopen as B&Qs later in the year. The remaining 147 Focus outlets will continue to trade as usual.

Law firm Clarke Willmott partner Stephanie Slinn said supplier retention of title clauses with Focus would now come into play. "My advice is to get in there early, inspect your stock and get an inventory of it before there can be any disposal either by the administrators trading the stores or possibly by any buyer of the business."

INDUSTRY PLAYERS ASSESS THE IMPACT

Neil Gow, director, Garden Industry Manufacturers' Association

"Sales will be picked up by other retailers. If one retailer goes out of business that has five per cent of the market, it doesn't mean the market shrinks five per cent. But the dominance of any one player is a concern."

Danny Adamson, retail managing director, Sinclair

"Focus was and is a great team but obviously trading under very difficult circumstances in an ever more competitive market. We had very limited exposure as we were only supplying them with occasional promotional slots of growing media."


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