Picking up the pieces

Published:  26 February, 2014

It came as a shock to the industry when one of its biggest Christmas decoration suppliers, Fuzzwire, entered administration shortly before Christmas last year. Mia Hunt investigates. 

Fuzzwire was one of the UK’s market leading design, manufacture and installers of Christmas scheme decoration displays at around 150 major UK shopping centres, including Canary Wharf and Westfield London, Bluewater in Kent, Lakeside in Essex, Metrocentre in Gateshead, Arndale in Manchester, thecentre:mk in Milton Keynes, Liverpool One and Cribbs Causeway in Bristol.

Andrew Sheridan and Phil Pierce, partners of restructuring and advisory firm FRP Advisory, were appointed joint administrators to Fuzzwire on 20 December 2013. 

Fuzzwire was headquartered in Keighley, West Yorkshire with another main storage depot at Leeds Bradford airport. The administrators said Fuzzwire had suffered over the past few weeks from a sharp deterioration in its financial position which put unsustainable pressure on its cash flow. Despite efforts to attract external investment or to sell the business as a going concern, no buyer emerged, resulting in the company’s former management being forced to lay off all staff during December.

Prior to entering into administration Fuzzwire employed a total of 65 full-time employees. Additionally 44 part-time workers and 78 self-employed subcontractors worked on the installation and dismantling of the displays.

All of Fuzzwire’s contracts around the UK have been assigned to MK Illumination, part of a large and highly experienced Austrian-owned group with operations across Europe servicing over 400 of the largest shopping centres.

According to Andrew Sheridan, partner at FRP Advisory, the assignment of Fuzzwire’s contracts should ensure that there is a continuing relationship for reinstallation of decoration schemes at a range of shopping malls at future seasonal periods in 2014 and beyond.

“It could have been a disaster for the affected shopping centres, who would have had to sit back and fend for themselves but we funded and carried out the dismantling of Fuzzwire’s decorations, so it’s been a demanding couple of months,” says Paul Dove, managing director at MK Illumination UK. 

“MK is a global company with huge assets and we’ve invested heavily in the UK,” he adds. “We’re taking stock and thinking about how best to move forward, but rather than take on new business, our main focus will be to look after our existing clients. It’ll be an important year for us and for the industry.” 

While The Seasonal Group’s Andrew Bontoft admits the administration came as a shock, he says clients have been cutting budgets, forcing suppliers to try  harder and harder to compete.

“The margins are very tight in this business and it’s very easy to lose control,” he explains. “I think the killer came in the year LDJ Design & Display and Centre Design merged to become Fuzzwire. All their resources went into moving to a new factory and that must have had a massive impact on the bottom line. 

“Shopping centres are wondering what they’re going to do, there isn’t as much choice in the market now, and it may be more difficult to get the products they want, but there is cautious optimism. We’ll have to wait and see.” 

While MK Illumination has taken assignment of over 100 contracts, is it understood that other companies are pitching for business, and what is clear is that Fuzzwire’s administration has caused a shift change in the market, with global companies concentrating on the UK with renewed vigour.  

First Christmas by Rosenau is one example. Based in Hamburg it is one of the leading Christmas decoration companies for shopping centres in Europe, and it has just announced representation in the UK after forming a partnership with Atmosphere, headed up by Russell Brown. 

First Christmas was founded 14 years ago and has designed bespoke Christmas decorations for 700 shopping centres around the world, while Brown has 20 years’ experience of working with clients including Trafford Centre, Bluewater and Bicester Village. 

“It’s unfortunate that Fuzzwire went under, but it has meant there is business up for grabs,” says First Christmas COO, Anita Stampfl. “We had already thought about the partnership before we heard of the administration but there is an opening in the market now and it felt like the right time.” 

All attempts to contact Fuzzwire’s former owner were unsuccessful with messages unanswered at the time of going to press.

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