Fulton's Fate

I am surprised and dismayed to learn that Fulton's furnishing stores have been placed in administration. I missed the local news yesterday and the development caught my eye this morning.

I was in the Belfast store a mere few weeks ago, enjoying one of their delicious lunches in the Hawthorn self-service restaurant.

According to David Elliott of the Belfast Telegraph, staff face an uncertain future after the company went into administration.

Fultons Fine Furnishings, which has traded for fifty years, is the latest locally-owned store to hit financial difficulties during the recession.

The furniture division consists of two shops at Balmoral Plaza in Belfast and another at Queen Street in Lurgan, from where the company was established half-a-century ago.

The move puts a total of 57 jobs across both the retail and property divisions at risk, but administrators PwC in Belfast have pledged to continue trading before deciding whether to sell the business or liquidate it.

Stephen Cave, joint administrator, alongside Paul Rooney at PwC, said,

“The intention is to continue trading. Once the immediate assessment of the trading and financial position is complete, we will have a clearer picture of future options. Our immediate priority is to communicate with the key stakeholders of the business, including employees, customers, suppliers and tenants.”

Fultons’ downfall follows a perfect storm consisting of downturn in the retail sector, in particular at the high-end level, and in both the commercial and residential property sector which the company has also been heavily involved in.

Still, the property business recorded a profit in the latest accounts filed at Companies House for the year ended February 2010 of just over £12,000, but that is sharply down on the £1m it made in the year to the end of February 2007.

The opulent Boucher Road unit in Belfast, which houses both a retail offering and a popular restaurant, epitomises the high-end flavour of the brand.

Its furniture found willing buyers throughout the boom years in Northern Ireland up to 2008, but tightening disposable income over recent years has meant fewer people are able to afford such tastes.

Donald McFetridge, a retail analyst at the University of Ulster’s Ulster Business School, said customers are nowadays becoming increasingly canny.

“Consumers have been forced to shop around for bargains in all sectors — including furniture and electrical — and, unless they find attractive or tempting deals, they are reluctant to part with their cash. Competition in Northern Ireland in the furniture sector is extremely tough with Lurgan (where Fultons have their base) possibly being one of the main towns in the region with an over-abundance of furniture outlets.”

Fultons’ demise follows on the heels of Dekko, another relatively high-end furniture retailer, which didn’t go in to administration but decided to close its doors in 2011, blaming cheaper competitors.

Another locally-owned store, Laser Direct, went into liquidation in 2010.

To my mind, there is no comparison, in terms of stock and customer base, between Fulton's and Ikea. Chalk and cheese. Nevertheless, I'd concur that it is a sign of the tough economic times we live in.

Donald McFetridge felt more retailers could go the same way as Fultons.

“This latest casualty will come as something of a blow to retailers trading at the high-end of the market. It is now clear and apparent that no one is exempt. Every retailer in every sector remains vulnerable as markets, nationally and internationally, remain volatile.”

The Northern Ireland Independent Retail Trade Association said local stores experienced the worst of the recession.

“The non-food retail sector is experiencing the worst of the recession as people don’t have the same disposable income and those who do are putting off buying non-essential major household furniture. With Ikea and the UK supermarkets taking a large part of this market, it is putting immense pressure on furniture retailers.”

And he was worried that if Fulton's close, the trend could continue: 

“In 2011, over a thousand independent traders in Northern Ireland closed. We are worried that this trend could double in 2012,” Mr Roberts added.