Mereway Kitchens Enters Administration

The kitchen manufacturer Mereway Kitchens has entered administration.

Paul Wood, Huw Powell and Mark Malone of Begbies Traynor LLP were appointed Joint Administrators of Highlight Green Acres Limited t/a Mereway Kitchens on 25 January 2024. 

Founded in 1986, Mereway Kitchens was a family-run kitchen manufacturer, supplying over 100 independent retailers across the UK as well as John Lewis.

in August 2023, Sigma 3 Group announced that it had successfully purchased the business and assets of Mereway Kitchens out of administration.  Substantial investment and significant progress was made, and the trading was understood to have approximately broken even during October and November 2023. However, Mereway suffered from falling consumer demand as a result of economic factors and has been unable to maintain the required sales volumes needed to make the business profitable.

Although alternative options were explored, the resultant trading losses and cash flow impact left the business with no option than to cease to trade. 

The Mereway website has a long list of questions and answers relating to the closure, some of which can se seen below:

Q – What is an administration and the role of the Joint Administrators? 

A – An administration is an insolvency process used by companies that are unable to pay their debts as they fall due. A moratorium has been placed over the Company as a result of our appointment. This means that no creditor can take legal action against the Company except with leave of the court. 

The role of the Joint Administrators is to realise assets for the benefit of creditors and to make distributions to creditors where available.

Q – Why has the Company entered administration?

A – The Company bought the loss-making business and assets of Mereway Kitchens Limited in administration on 18 August 2023 and sought to turn around its fortunes. 

Substantial investment and significant progress was made achieving approximately break-even trading during October and November 2023. However, Mereway has suffered from falling consumer demand as a result of economic factors and has been unable to maintain the required sales volumes needed to make the business profitable. 

Although alternative options were explored, the resultant trading losses and cash flow impact left the business with no option than to cease to trade. 

Q – I am a former employee who has been made redundant – how do I go about making a claim? 

A – ERA Solutions are assisting the Administrators with their duties and letters to employees explaining how you can make a claim against the Redundancy Payments Service were handed to employees at the redundancy meeting held on 26 January. Any employees who have not received a letter should email claims@era-solutions.co.uk to receive copy correspondence and ensure they have your correct contact details. 

Q – I am interested in contacting former employees to offer potential employment. Can you provide their contact details? 

A – The Joint Administrators have the consent of former employees to provide them with details of potential new employers. Please email details of any roles to mereway@btguk.com so that these can be passed on as appropriate. 

Q – What is my position if I am owed money by the Company? 

A – You will have a claim in the administration, notice of which will be sent under separate cover within seven days of our appointment together with a proof of debt form. If you have not received a copy of this notice after seven days of our appointment, please contact the Joint Administrators via email at mereway@btguk.com to ensure we are aware of your contact details. 

Q – I am a customer with an outstanding order. Will my order be fulfilled?

A – Unfortunately, the Company has ceased to trade and completing work in progress is not considered viable, so no further orders will be fulfilled.

As with other creditors, you will have a claim in the administration, notice of which will be sent under separate cover within seven days of our appointment together with a proof of debt form. If you have not received a copy of this notice after seven days of our appointment, please contact the Joint Administrators via email at mereway@btguk.com to ensure we are aware of your contact details. 

Q – As a creditor, how much money am I going to get back, and when?

A – This will be dependent on asset realisations, in particular the collection of debtor monies. The Joint Administrators will be working hard with various stakeholders to achieve the best outcome available and will provide an update to creditors within eight weeks of their appointment when their proposals are sent to creditors.

We appreciate that the failure of the Company will create a difficult time for all parties involved and so we will endeavour to provide an update to these FAQs if the likely outcome becomes clear sooner.

Q – I have supplied equipment or assets to the Company under a lease, hire or hire purchase agreement. Can I recover my assets?

A – Your first port of call should be to contact the Joint Administrators’ agent via email to sbamford@gordonbrothers.com to make them aware of your assets and the location they were supplied.

Please provide a copy of any agreement with the Company so that the Joint Administrators and their agents can review the documentation and seek to arrange access for removal of assets as appropriate.

Q – I have supplied stock to the Company subject to retention of title. Can I recover my stock?

A – Your first port of call should be to contact the Joint Administrators and their agent via email to mereway@btguk.com and sbamford@gordonbrothers.com to make them aware of your potential claim and the location that you supplied stock. 

These claims need to be dealt with quickly so you will be issued with a questionnaire to complete so that you can provide evidence of supply and the retention of title clause. The validity of any claim will then be assessed by the Joint Administrators and we and our agents will seek to liaise with suppliers to provide access to properties to seek to identify goods subject to claims as appropriate.

Q – The Company has ordered goods or services from me, but these have not been delivered. Should I still deliver the goods?

A – Please do not fulfil any orders placed by the Company before our appointment unless you receive our written confirmation that the goods or services are still required.

With effect from the date of our appointment, the Company will not be responsible for any payment for goods and services delivered to it except against orders which bear the Joint Administrators’ signatures, or one of their authorised representatives. All such authorised orders will be paid for in accordance with your normal trade terms, unless otherwise agreed with you.

Q – Will any attempts be made to sell the Company’s business and assets?

A – Options for sale of the business were explored but given the timelines available and the position of the business this was not possible.. As the Company has ceased to trade and completing work in progress is not considered viable, the Joint Administrators do not propose to proactively market the Company’s business or seek discussions with interested parties as the prospect of any sale is considered highly speculative.

If any party is interested in the Company’s brand or intellectual property, they should email sbamford@gordonbrothers.com with details of their interest.

Q – How do I go about trying to purchase any of the Companys’ assets?

A – The Joint Administrators have appointed independent agents, Gordon Brothers to sell the Company’s chattel assets including stock, vehicles and plant & equipment. Details of these will be available for sale on their website at https://assets.gordonbrothers.com/?page=1&status=2 in due course.

Source : Mereway Kitchens website

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