Administrators of manufacturer Akula Furniture Limited has disclosed that heavy US investment and a downturn in orders were the main factors involving the company going insolvent.
Julian Pitts and Robert Maxwell, of Begbies Traynor LLP, were appointed as joint administrators on 3 October 2016 after the company racked up an unsecured creditor bill of £1.59m, alongside a £250,000 secured creditor debt to HSBC Bank.
According to the report filed on Companies House, Akula pumped in significant funds to develop a market in the US with including investing heavily in trade shows, but failed to generate a return to the levels the business had hoped for.
To view the Full Mattress Report, you must subscribe to our Annual Print and Online bundleSubscribe Here
Furthermore, Akula suffered a decline in orders as a result of the currency market fluctuations due to Brexit, which placed the company in a position where it couldn’t meet its ongoing obligations.
Since the appointment of administrators, Akula was acquired by Akula Living Limited, with owner Timothy Appleton a common director in both companies, for a sum of £250,300, with the purchaser offering to collect debts of the business totalling more than £31,000.
The pre-pack sale of the business was completed on 10 October 2016, resulting in the HSBC creditor claim to be repaid in full, as well as confirming that Akula’s employees would transfer over to the purchaser.