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DIY chain staff face uncertain fate
Friday May 6th 2011
Private equity-owned Focus DIY's plan to put itself into administration means the future of nearly 4,000 of its staff hangs in the balance.
The company, which runs 178 stores with 3,919 staff, announced the move, saying it had defaulted on a credit facility and had no alternative.
It asked Ernst & Young to act as administrator and is expected to keep trading until the official appointment of an administrator.
Focus had sought to cut its rent burden from landlords, and underwent a controversial company voluntary arrangement in 2009. The company's website said it was unable to take orders online. It is understood that it could take days for an administrator to be appointed.
Private equity firm Cerberus bought Focus in 2007, reportedly paying just £1. Focus was heavily indebted at the time and Cerberus said it would pay off the firm's £174 million of debts. It appointed Bill Grimsey, former boss of the Big Food Group, which owned the Iceland frozen food chain, as chief executive in charge of a new management team.
It is understood Cerberus invested some £200 million in trying to turn Focus DIY around but the chain struggled recently against competition.
Copyright © Press Association 2011
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