Another sofa retailer in trouble
Following the struggles of UK furniture retail chain Land of Leather comes new that one of its main rivals, ScS Upholstery, is also in trouble.
Shares in ScS fell by more than a third after an insurance company refused to give cover to five of its suppliers against ScS being unable to pay them.
The withdrawal of credit insurance for the firms—three of which are principal suppliers—comes amid increasing concerns about the effect on the furniture market of a slow-down in house sales in the UK.
Sunderland-based ScS said the unnamed insurer's move had hit the short term finances of the suppliers involved.
The company said: “ScS is in discussions with each of the suppliers affected and is continuing to trade with them in the normal course of business whilst various financing options are being reviewed.”
Chief executive David Knight added that the company was still in talks with the unnamed insurer. The firm has 14 suppliers in total.
ScS, which made pre-tax profits of £7.1 million in 2007, had been expected to break even this year, but analysts now expect it to make a loss.
