Tough DIY market to blame
DIY retailer Focus is in debt restructuring talks with creditors, and hopes to have a long-term solution in place next year.

The UK's fourth largest DIY chain,owned by private equity groups Apax and Duke Street Capital, is thought to have a debt of more than£160 million.

Credit rating agency Moody's downgraded the retailer last week, on fear that it might struggle to keep up with debt repayments. Fitch Ratings was also downbeat and said: 'The heightened probability of default is on expectation of poor long-term profitability and weak free cash flow generation.'

Focus, which like other DIY groups has been hit by a consumer downturn, is thought to have been trading more strongly recently, but rising interest rates and stronger competition have hit the DIY market.

The UK DIY market is likely to have suffered a sales fall of 0.2 per cent in 2006 - its second year of decline - reducing the value of the DIY market to£16.1 billion, according to Verdict.

Topics