The Lancashire-based company GGI Office Furniture has gone into administration, according to The Business Desk.
This development has resulted in the loss of nearly 100 jobs in the area – a heavy blow to the local community.
Why did GGI go into administration?
GGI Office Furniture (UK) centred around the manufacturing and supplying of office furniture around the north west. It was part of the Canadian-based Global Group, but previously traded as Prince Morgan.
Early in 2015, the company stated the main risk to profitability was the continuation of operating in low margin product categories which did not return the high volumes of previous years. It seems that this is the core reason for the business' failure.
The accounts for May 2015 stated that the company made a £1.3 million loss, and the accounts for 2016 are currently overdue, suggesting that the business has continued to decline.
The company had hoped its £9.5 million turnover would attract a buyer, and it was put up for sale several weeks ago. Despite interest from more than 20 parties, however, no firm offer was reached and the company has been forced into administration.
Consequently, GGI Office Furniture (UK) has ceased trading and the 99-strong workforce has been made redundant.
Some of the staff had been working for GGI for over 30 years, and many were shocked about the announcement. However, local councillor Dave Smith stated that some staff had noticed warning signs and had been aware of the changes for several weeks.
What happens next?
When any business goes into administration it is restructured and reformed to try and establish a viable business model.
CLB Coopers' senior directors Mark Getliffe and Diane Hill have both been appointed as joint administrators and hope to turn the company around with help from external investors.
Getliffe stated: "Unfortunately, after much effort by management, the volumes required to make the business viable going forward.
“We do still have interested parties looking at parts of the business which was renowned for manufacturing a wide range of products to a high standard.”
As for the employees who were made redundant, the administrators have been approached by local employers who have expressed interest in hiring ex-GGI employees. Several have already acquired new jobs, and the administrators are "sure there will be many more".
The administrators will announce their final proposals for GGI in eight weeks' time. It is hoped that this historic company will regain its footing and become profitable once more.
If you are concerned about your company, or the company you work for, going into administration, get in touch today.