Retailer Fonehouse has put one of its subsidiary units into administration as it looks to free itself of four shop leases and drive forward its franchise programme under a new division.
Fonehouse managing director Clive Bayley has appointed insolvency specialist Leonard Curtis as administrator to Fonehouse Holdings, which has traditionally run the company’s own store portfolio.
Bayley has swapped out eight of the 12 stores it owns outright, and placed them into new trading company Fonehouse Group, through which the company is running its burgeoning franchise portfolio. Bayley is understood to have placed Fonehouse Holdings into administration to remove the liability of the four remaining shop leases.
Bayley has a 98 per cent share in Fonehouse Holdings; the remaining two per cent is owned by Fonehouse Ltd, which he owns outright. Fonehouse Group, set up in March, is also owned by Fonehouse Ltd.
Leonard Curtis confirmed Fonehouse Holdings had been placed into administration.
Bayley said: “We want to escape from four leases fairly quickly where stores aren’t performing. The only way to do that is to transfer our remaining assets to one of our other companies and drop Fonehouse Holdings. We want to renegotiate terms on premises with landlords and franchise out the stores at a sensible price.“
He added: “The company is not going under by any stretch – everything is secure, we’re trading well and continuing to roll out franchises.”
Fonehouse currently has 24 franchise stores. Fonehouse Holdings reported turnover of £12.7 million in the year to February 2008; its latest available accounts. Fonehouse Ltd reported annual turnover of £500,000 to September 2007.