In accounts just filed at Companies House for the 12 months to May 31, the auditor noted that Sofa Workshop is reliant on the continuing support of its shareholders and that there are “no other finance facilities in place”.
The auditor's report added: “Due to the current economic climate, there is uncertainty as to whether trading can be maintained at the level necessary for the company to operate without need for further funding from shareholders or third-party funding.”
BDO's report noted “the existence of material uncertainties which may cast significant doubt about the company’s ability to continue as a going concern”.
In the year to May 31, Sofa Workshop posted a£2.7 million pre-tax loss against a loss of£3.3 million for the 17 months to May 31, 2007. It recorded sales of£30 million against£35.1 million for the previous financial period.
The 32-store Sofa Workshop chain was bought for£1.8 million from MFI in 2006 by rival furniture retailer New Heights, which went into administration in May.
When Sofa Workshop was rescued by a consortium of existing shareholders at the time of New Heights’ collapse,£1.9 million was lent by the new owners.
Sofa Workshop is the latest retailer in the sector to potentially be hit by the downturn and consumers’ reluctance to buy big-ticket items. Earlier this year Land of Leather was refinanced and ScS was bought by a private equity company after going into administration.
No comments yet