UK - Sun European eyes second furniture rescue

The company has struggled throughout 2008 amidst the economic downturn, which has seen house sales plummet and consumers cut back on high-end purchases, with three profit warnings issued since Christmas 2007 and a pre-tax loss reported for the year to August. A series of measures have been taken in the last six months in an attempt to prolong the survival of the business, including a £13.5m share sale in June underwritten by Investec, company directors defering their salaries until further notice, large-scale cut backs on advertising and staff costs, and the suspension of the store opening programme. Despite this, shares have plunged by 99.8% from their peak of £30 in early 2007 to just 6.5p on Friday, which equates to a market capitalisation of just £2.3m.

Land of Leather said in a statement that the approaches merely represent early stage expressions of interest, which may or may not lead to any offer for the business. It also stressed that the business has no debt and there is therefore no requirement to pursue a sale of the business unless this realises shareholder value. The retailer also reported that total sales orders declined by 47 percent in the three months to Nov 2.

Other bidders said to be interested in the firm include retail turnaround specialist Hilco, which has also submitted a £1 bid for collapsed Woolworths.

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