Fit-out firm calls in administrator after decline in commercial market in the capital cuts turnover by 20%
Fit-out contractor Spectrum Projects has become the first major victim of the sharp drop in London’s commercial market. Directors at the £49m-turnover firm called in administrator Rothman Pantall to its London headquarters last Wednesday.
Rothman Pantall refused to discuss its role but it is understood to have laid off all but a handful of the firm’s 80 staff. Rivals such as Overbury and Interior/Exterior are thought to be considering recruiting former Spectrum employees.
The remaining staff will oversee the completion of nearly finished jobs, which include the £15m fit-out of a Richard Seifert-designed block on Marylebone Road, central London, for Woolworths.
It is the most significant loss in the fit-out sector since Churchfield collapsed in 2001.
A source said senior directors, including Brian Tripp, the founder and managing director, were hit hard by last week’s events. The source said: “You are not going to see a Spectrum No 2 set up soon. They are completely devastated. This decision [to go into administration] was not taken lightly at all.”
Market sources said the firm was hit by the collapse of the fit-out market in the capital in 2002/3, during which private commercial orders dropped by one-third (see graph).
There are plenty of hooligans in the sector but it wasn't a hooligan
Source at fit-out rival
The firm considered moving into other sectors such as retail and housing, and some claim it cut its margins. The firm’s turnover fell from £61m in 2002 to £49m for the year to 31 December 2003. Its pre-tax profit was £70,073 last year after a loss of £401,588 in 2002.
The firm had won a £13m contract to fit out part of St George’s Imperial Wharf apartment scheme in Vauxhall, south London, which is in the preconstruction phase. It is unclear whether St George will retender, although the firm that lost the job to Spectrum, Structuretone, said it remained interested.
A source at one rival said: “It’s never a good thing for the industry to see a credible player fall. The quality of their people, their performance and delivery was on the whole very good. There are plenty of hooligans in the sector but it wasn’t a hooligan.”
Spectrum was founded in 1996 by Brian Tripp, who had worked with US contractor Nico, one of the first firms to introduce the niche fast-track fit-out market to the UK.
Tripp teamed up with fellow Nico employee Matt Bray for the venture. It was initially backed by contractor Bellwater, which took a 55% stake.
- A management buyout is thought to be imminent at the fit-out arm of construction group Connaught, which is listed on the alternative investment market.