One of Rathwood’s largest creditors has agreed to keep supplying stock to the business to allow it to continue trading, but customers hoping for refunds on products bought and never delivered may have to wait at least two months to see if they will get redress.
Padraic Bermingham, of Strata Financial in Dublin, has been confirmed as interim examiner of the home and garden retailer based on the Carlow-Wicklow border.
His appointment comes after an alternate insolvency process, aimed at supporting small businesses and initiated by Rathwood’s directors, was halted over the weekend.
Cork-based accountants Gerard Murphy & Co formally entered the Small Company Administrative Rescue Process late last week but subsequently received details of an examinership application and fresh proposals made by Rathwood creditors Paleo and Anhui Living.
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Rathwood entered “a strategic partnership” with Anhui last September and said it would give it access to “300+ factories across China, Malaysia and Vietnam” with “fulfilment from new warehouses in Germany and the UK”.
Murphy told The Irish Times he and the directors had decided following a series of meetings over the weekend that the new proposals gave Rathwood the best chance of successfully emerging from insolvency, so the earlier process was formally stopped on Sunday evening.
The examiner now has sole responsibility for the retailer’s future and will spend the weeks ahead seeking investors and drawing up plans to restructure Rathwood.
Any support it gets from its creditors in the short term is specifically aimed at new business, which means those waiting for refunds or deliveries of products ordered before last Friday are unlikely to get clarity on their orders until the examinership process comes to an end.
There are fears that as unsecured creditors those customers may be left with nothing, although any future investor may decide to honour previous orders as a gesture of goodwill and to stave off inevitable criticism.
In a statement published on its website over the weekend, Rathwood said it would continue to trade as normal during the examinership process.
“We want to reassure all our customers, suppliers and partners that we continue to trade as normal and operate fully in accordance with all applicable laws,” the statement said. “Our business remains open, and we are continuing to sell goods and engage with customers and stakeholders as usual.”
The statement added: “At this time, we regret that we are not in a position to address any outstanding payments or refund requests relating to amounts owed up to today. These matters will be reviewed as part of the examinership process, and we will provide further updates once the appointed persons have completed their initial report.”
Rathwood has been operating for more than 30 years and grew into one of the biggest outdoor living retailers in the State, expanding in recent years with concessions in other retail outlets as well as a significant online presence.
Last year, it emerged that customers who had bought products, including garden furniture and firewood, through its website had been left waiting months for orders to be delivered, with many rescheduled on multiple occasions.
In a helpline report published last week, the Competition and Consumer Protection Commission (CCPC) said it had received 565 calls about Rathwood last year, making it the second most complained about company in Ireland behind Ryanair.
Earlier this month, the CCPC said the retailer had signed legally binding commitments and committed to issuing refunds to consumers who bought products on its website before cancelling the orders over delivery delays.
