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The Focus fallout has begun to reveal itself in earnest with the news that supplier Proteam has been forced into administration by the retailer's own woes. Administrators told DIY Week that Proteam were owed in the region of £3m and that, because about 35% of Proteam's business had been through Focus, its troubles were a direct consequence of the Focus collapse. And, with a £3m hole in the accounts and a third of its business wiped out in one go, it's no surprise that the company was left in an untenable position.

The question everyone is now asking is 'who else is likely to suffer?' A full list of creditors is not yet available and Focus administrators have another fortnight before they have to release it (and speaking to them at the time of writing this it seems clear they will not be releasing it before the eight-week period is up).

However, it's also clear from Proteam's experience that there are likely to be suppliers in the market who will have been hit hard.

One supplier told me they had been travelling to the Focus head office to collect payment on all deliveries for some time before the firm entered administration. Other rumblings in the market have named some pretty high-profile brands as being badly affected, even speculating about their ability to survive the hit they are likely to take.

And of course, it isn't just Focus' suppliers that will feel the effect, it's those further down the supply chain - suppliers to the suppliers, logistics providers and all the support businesses that contribute to getting the end product on shelf, creating a knock-on effect that's felt by far more firms than will appear on the list when it's finally available.

How much creditors are likely to receive, if anything, depends on how much is in the pot at the final knockings. News from liquidators is that the closing down sales are going well, having "smashed all expectations" on their opening weekend.

However, the news will be cold comfort for the likes of Proteam, whose products are currently being sold at up to 50% off, with no guarantee that most creditors will see any of that revenue.

So for now, it's a case of watching and waiting, for a list of creditors, for further fallout and, ultimately, now the store closure dates have been announced, for a full stop to Focus.
View User Profile for Will Parsons Blog entries from Will Parsons, former editor of DIY Week and DIYWeek.net.







Posted by Will Parsons | 16 June 2011 | 13:23 | More from: Will Parsons' blog

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