FRP guides leading furniture group back to solvency through strategic CVA processes, securing future trading and maximising creditor returns

FRP’s Restructuring Advisory team navigates complex financial challenges to preserve JDP Furniture’s operations, ensuring long-term stability and preserving enterprise value

Background

JDP Furniture Group Limited (JDP), a leading furniture manufacturing and retail group, operated through multiple interconnected trading entities. One of the key divisions, served as the main supplier of furniture to Laura Ashley. However, shortly before the Covid-19 pandemic, Laura Ashley went into Administration creating a significant cash flow deficit that destabilised the Group. Seeking financial guidance, management engaged FRP to explore solutions.

Action – CMF

FRP’s Restructuring Advisory team, led by Partners, Nathan Jones and John Lowe, were appointed asAdministrators to five of the group’s companies following the UK’s first Covid lockdown. In response to the rapidly shifting economic landscape, the team developed and executed a strategy to maximise returns while stabilising operations. This included reorganising manufacturing capability to ensure that Celebrity Motion Furniture Limited (CMF) could operate independently of the other entities. They explored funding options, pulled together detailed forecasts, managed employee relationships (and furlough payments),  ), and permitted manufacturing to commence again when appropriate within Covid guidelines

Action – JDP

Once the turnaround strategy for CMF had been demonstrated to work, the team turned their attention to the holding company, JDP, and began preparing it for the same strategic process.

The strategy involved holding JDP in Administration for a prolonged period to ensure that the strategy was robust with the uncertainties presented by Covid, which required the rare process of auditing a company in Administration. The team also restructured JDP’s shareholding to incentivise key management, before leveraging CMF’s anticipated exit from CVA to secure a funding line for JDP’s recovery.

Outcome

With FRP’s role officially complete, the Group is now financially strengthened, ensuring the continuation of trading while preserving stakeholder interests, setting the foundation for long-term success. This case highlights the viability of CVAs as an exit strategy from Administration – an approach rarely executed yet successfully implemented in this instance for two interconnected entities.