The retailer has stopped collecting cash deposits from customers and options on the table include placing the business in administration. One refinancing option has already been rejected by creditors.
Suppliers including Chateau d'Ax, Nicoletti and Premier were understood to have rejected terms that included accepting payments for 30 per cent of the value of goods delivered until July 31, as well as agreeing to stretch payment terms to 60 days.
Furnitureland's woes follow rival Klaussner's collapse into administration a fortnight ago. Powerful trade insurer Euler Hermes has now pulled Furnitureland's cover and suppliers think their interests could be better served by calling in their policies.
The 28-store retailer has made a 'cash call' to investors however one of its backers is understood to be unwilling to put up more funds.
A source close to Furnitureland said a clearer picture would emerge by Monday. It is understood to be holding two board meetings a day to review its liquidity and trading position.
Furnitureland made a loss of£3.8 million on sales of£64.7 million in the year to March 27 last year. However in May joint managing director Steve Adams claimed the retailer was trading strongly and would return to the black this year.
Adams said today he was 'optimistic' that Furnitureland could continue as a going concern but refused to comment on the state of negotiations.
Venture capitalist SB Capital acquired Furnitureland in January last year and picked up a further six stores from the break-up of Courts. The retailer's predicament is a blow to the venture capitalist that has long proclaimed it will bring about consolidation in the UK furniture sector. It recently benefited from the float of Land of Leather, in which it also has a stake.
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