Bed specialist Sleep Depot, which operates through more than 100 stores and concessions nationwide, has gone into administration.
The collapse will hit Land of Leather, which has 71 Sleep Depot concessions in its stores. Land of Leather stated in its half-year results last week that Sleep Depot was in the process of finalising a financial restructuring because of the very challenging market conditions. In a statement this morning, Land of Leather said it understands this restructuring failed.
Land of Leather said annualised rent from Sleep Depot amounted to£4.8 million. The loss of this concession rental income will be£1.6 million in the remainder of the financial year to August 3, but will be mitigated to some extent by Land of Leather trading from the vacated space. The sofa retailer said this alternative use of space should not result in a reduction in profitability in the longer term.
Last week, Land of Leather announced a slump in like-for-like sales and the retirement of chief executive Paul Briant. Steve Jenkins will join the retailer as chief executive from August 4.
Land of Leather like-for-likes fell 16 per cent in the 26 weeks to January 27 and total sales order intake was down 4 per cent. Revenue was up 15 per cent to£133.3 million.
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