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By annabelle dickson Business writer
Tuesday, August 21, 2012
Long-established regional furniture business Hovells is set to close after facing increasing costs and aggressive price cutting throughout the industry.
Staff at shops in Barker Street in Norwich and London Road South in Lowestoft, and at the Hovells warehouse in Weston Road, in Norwich, are currently being consulted about plans to cut 25 jobs as a result of the closure.
A sale to clear £2.4m worth of stock has started, and the shops will close when everything goes.
The business, which was famous for its basket selection and originally based in Bridewell Alley, has been trading for almost 150 years.
It was bought by Butcher Group Ltd in 1969. The Bridewell Alley shop closed and the business moved to Barker Street nearly eight years ago. It has since diversified into selling gifts and accessories, as well as furniture. Hovells opened a shop in Lowestoft in 2006 and developed its online business four years ago, which has became the bigger part of the business.
Director Jonathan Butcher said: “While we have got the stores locally, a large proportion of the business was outside the area.
“Obviously the background is that the economic conditions are very tough and the furniture industry is incredibly competitive.
“Our biggest proportion of the business was online. The internet has had a major impact on pricing because people have been able to price match.”
He also said the business had been under exceptional cost pressure and nearly all of the furniture, 90pc, is imported from the Far East.
He said: “The cost of the goods coming from the Far East have risen enormously. The costs of shipping have increased. The costs of manufacturing in the Far East have gone up. The prices in the UK have gone down. The margin has disappeared.
“In the end we did our sums and decided and decided to close with our accountants and lawyers.
“There is a limit to how much you can keep putting money in. The decision had to be made.
“Our business model could no longer be sustainable.”
Mr Butcher added: “We have £2.4m of stock to sell. We are going to be selling that over the next few months. When that is gone the business is going to close.”
The words ‘I’m out’ too often spell the end for an invention before it has even left the drawing board.