Nearly 4,000 jobs are at risk as home improvement retailer Focus DIY announced it had gone into administration.
A statement from the company confirmed that its decision to go into administration had been prompted by “a default under the senior credit facility”.
Administrators Ernst & Young (E&Y) said that the business had been under “considerable pressure” from the housing market slump and low consumer confidence.
Focus DIY’s 178 stores will continue to trade while E&Y look for a buyer for the company. The firm currently has annual sales of about £450 million.
Simon Allport, a joint administrator from E&Y, said: “Despite management’s actions to tightly control costs and restructure the operations, it has not been possible for the business to continue to trade outside of insolvency.”
A number of buyers have already expressed an interest and Chris Dawson, who owns The Range chain of homeware stores, said he would consider buying the business if the price was right.
A private equity firm, Cerberus, bought Focus DIY in 2007, by which time it was £174 million in debt, for £1.
The company managed to avoid administration in 2009, when BDO insolvency practitioners put a company voluntary arrangement in place to restructure the business and repay a percentage of debts over a contracted period of time.