One of Home Retail Group’s largest furniture suppliers has gone into administration.

UK furniture manufacturer Meristem Holdings is a major supplier of flat-pack furniture products to Home Retail Group – principally to its Argos chain.

Products supplied by Meristem account for about£80 million of the group’s annual sales.

In a statement, Home Retail Group said: “The financial impact of Meristem's current difficulties on the group will clearly be dependent on the outcome of Meristem's administration, as well as the group's review of alternative sources of supply currently being undertaken.”

Home Retail Group is searching for other suppliers to fill the gap. Meristem employs 270 workers in Glastonbury, Somerset.