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Buy As You View crashes into administration


One of Britain’s biggest rent-to-own retailers has called in administrators, putting hundreds of jobs at risk and raising renewed fears about the wider health of the sector.

Sky News has learnt that the parent company of Buy As You View has appointed the professional services firm EY as administrator less than 18 months after agreeing a customer redress programme with the City watchdog.

Dunraven Finance, which is based in Bridgend, Wales, has been struggling since the introduction of stricter lending controls by the Financial Conduct Authority (FCA), and has racked up millions of pounds in losses.
The move to appoint EY could threaten the jobs of the nearly 230 people who now work for the company, with 40 having been made redundant on Friday, according to sources.
Last year, Rutland Partners, the private equity groups which sparked controversy over its stewardship of the Bernard Matthews pension scheme, lost control of Buy As You View in a deal which saw it taken over by its main lender.
Buy As You View operates using a hire-purchase model under which consumers make weekly payments to rent products such as a television, fridge or furniture until they own it outright.
The company has roughly 40,000 customers and recently switched to an online sales model in an effort to drive down costs.
In addition to its headquarters, it has five smaller offices and distribution hubs across the country.
Insiders said that EY would seek to reassure Buy As You View customers that their repayment schedules would remain in place during the period of administration.

Customers should adhere to their agreements with the company to protect their personal credit rating and maintain service levels, a person close to it said.
A buyer will now be sought for the business, although the broader environment facing rent-to-own retailers is already becoming significantly tougher.
The FCA took over responsibility for regulating consumer credit firms in 2015, and a year later forced Buy As You View to repay nearly £1m to 59,000 customers who had been unfairly treated by the company.
Late last year, Hayfin Capital Management, Buy As You View’s lender, took control of the business but has been unable to stem its losses.
Bright House, Buy As You View’s larger rival, is also undergoing a restructuring of its own, with lenders submitting a revised plan to the FCA and other stakeholders in recent weeks.
Alteri, a fund affiliated to the hedge fund giant Apollo Global Management, holds approximately 30% of Bright House’s senior bonds and is expected to push in the near term for a debt-for-equity swap.
Other players in the sector include Perfect Home.
EY confirmed its appointment, saying that “the directors of Buy As You View concluded reluctantly that they should place the company into administration to allow options to be assessed by the joint administrators and to enable further restructuring to be undertaken”.

Source: Sky News