UK upholstery manufacturer, Ultra Furniture Ltd, appointed administrators yesterday, resulting in 160 job losses, following news that its biggest customer, Tesco Direct is set to close this summer.

Steven Muncaster of Duff & Phelps, was appointed administrator to Dudley-based Ultra Furniture Limited on June 6.  

Mr Muncaster explained that the business, which has been working with some of the UK’s best known upholstery retailers and high-street brands at the same site for over 30 years, “has been directly impacted by the announcement that Tesco Direct is being closed in July.” Tesco Direct accounts for more than 70% of Ultra Furniture’s sales.

Ultra Furniture also has a dedicated production site in Kingswinford in the West Midlands, which employs 160 people. Despite having continued to invest in and develop its facilities, design capabilities and quality systems, the company couldn’t survive the loss of such a lucrative contract.

Mr Muncaster added: “The directors of the business are clear that at this stage that the business as it currently stands cannot continue to trade following the loss of such a major customer.

“While we are continuing to market the business with the aim of finding a buyer, we have to stress that this is a hugely challenging market undergoing consolidation and cost pressures. We cannot confirm at this stage what will happen to the two sites and the current employees but we will be keeping people informed at every stage of the process.” 

Ulttra Furniture Ltd was acquired by private equity firm, Helium Miracle 230 Ltd in October 2016 and its holding company is listed as Helium Sofa Group Company.