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qfcGrantham
QFC's Alma Park Road factory in Grantham, Lincolnshire
QFC, Britain's third largest wholly privately-owned sofa maker, faces an uncertain future after a series of factors combined to leave directors no choice other than to put the company into administration.

 

Chris Pole and Mark Orton, both of KPMG, have been appointed joint administrators of the Grantham business — The Quality Furniture Company — which employs 271 people.


The Lincolnshire manufacturer, one of the largest volume sofa makers in the UK, continues to trade with KPMG hoping to find a going-concern buyer.


QFC sells to some of the UK's biggest sofa and general merchandise retailers and generated sales north of £30 million in 2016, its latest publicly-available accounts.


In an emailed statement to The Furnishing Report last night, QFC directors said the sharp devaluation in sterling following the Brexit vote in 2016 and the significant increase in raw material prices during 2017–18 had put huge pressure on QFC’s profit margins.


"The inability to pass on these increases to customers turned a net profit of £940,000 in 2016 into a loss of £495,000 for 2017.


"In light of the deteriorating financial performance the company took decisive action to restore the business to profitability by consolidating its manufacturing on one site and making significant reductions to overheads. This plan was implemented in April when shift working commenced.


A fire destroyed an inbound shipment of 2,500 sewn covers in mid-April, causing massive disruption to production over the next few months with a consequent negative impact on both profitability and cash flow, the directors added.


The company drafted in KPMG in the middle of May to advise. At the same time, it embarked on another round of redundancies to further reduce costs.


"Ongoing trading losses together with the exceptional costs of restructuring the business continued to put cashflow under significant pressure. Despite every effort to put together a credible rescue plan, this proved impossible, leaving the directors with no option other than to appoint an administrator."


In a separate statement circulated to the wider media, joint administrator Chris Pole said: "We will be looking to trade the business in the short term and would advise any interested parties to contact the joint administrators as soon as possible to express their interest."



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