Land of Leather

Land of Leather was a British furniture retail business focused primarily on leather sofas and related leather-upholstered furniture. Founded in 1994 by Jerry Briant, the company developed a multi-store presence in the United Kingdom and later operated in Ireland as well. Its retail model was built around showroom-based sales of sofas and other furniture, with the brand becoming associated with leather seating at a time when household spending on furnishings and residential property remained relatively strong. The company became a publicly traded business in July 2005, when it floated on the London Stock Exchange with assistance from Investec. Its shares traded under the symbol LAN. The listing provided access to public capital and supported the expansion of a sizeable store estate. By December 2008, Land of Leather employed approximately 850 people across 109 stores in the United Kingdom and Ireland, making it a significant specialist furniture retailer in its markets. The business was subsequently exposed to the deterioration in the United Kingdom housing market and the broader financial crisis. Fewer consumers were buying or moving homes, reducing demand for discretionary household furnishings. At the same time, weaker consumer spending and difficult conditions in the banking market made it harder for the company to obtain additional financing. In January 2009, Land of Leather issued profit warnings and considered raising £15 million through a new share issue. The company had also announced in December 2008 that it was in discussions with several potential buyers. That announcement caused its share price to rise by 38.5 percent, but the discussions ended later that month because the parties involved were judged not to offer sufficient value to shareholders. On 12 January 2009, Land of Leather Holdings plc entered administration. Deloitte appointed Lee Manning and Nick Edwards as joint administrators. Although the company was described as debt free at the time, it could not secure the additional funds required to continue trading. The administrators initially sought a sale of the business as a going concern. On 26 January 2009, they announced the closure of 33 stores, reducing the estate to 76 locations. The remaining stores closed soon afterwards, and Land of Leather ceased trading in early 2009. The brand was also connected with litigation concerning Linkwise sofas manufactured in China. The sofas contained sachets of the mould-inhibiting chemical dimethyl fumarate, commonly abbreviated as DMF. More than 300 users reportedly suffered serious skin rashes after exposure. Land of Leather held insurance with Zurich Financial Services, but the insurer declined coverage on the basis that the policy terms had been breached. On 18 March 2010, the High Court of England and Wales upheld that position, meaning affected purchasers were not indemnified through that insurance policy. Because the retail chain had already ceased trading, the case became one of the significant post-collapse issues associated with the former brand.

Land of Leather was established in 1994 by Jerry Briant as a specialist furniture retailer. Its core proposition was the sale of leather sofas and other leather-upholstered furniture through physical retail stores. The business expanded beyond its original United Kingdom base and operated in both the United Kingdom and Ireland. In July 2005, Land of Leather became a publicly traded company through a flotation on the London Stock Exchange. Investec assisted with the listing, and the company traded under the symbol LAN. Public-market access supported the development of a substantial store network. By December 2008, the retailer had 109 stores and employed around 850 people across its two operating markets. The company's expansion was closely tied to discretionary consumer spending and housing activity. Furniture purchases are often associated with moving home, furnishing a new property, or replacing household goods during periods of stronger consumer confidence. The weakening United Kingdom housing market therefore placed pressure on Land of Leather. A decline in home purchases and moves reduced demand, while the broader financial crisis also constrained household spending and impaired the availability of bank finance. In December 2008, Land of Leather said it was involved in buyout discussions with a number of interested parties. The announcement prompted a 38.5 percent increase in the company's share price. The discussions did not produce a transaction, however, and ended later in the month on the grounds that the proposals did not provide sufficient value to shareholders. In January 2009, the company issued profit warnings and planned to raise £15 million through a new share issue in an attempt to strengthen its finances. On 12 January 2009, Land of Leather Holdings plc entered administration. Deloitte appointed Lee Manning and Nick Edwards as joint administrators. The company was reported to be debt free, but it could not obtain the further funding needed to continue operations. The administrators initially sought a purchaser who might acquire the business as a going concern. On 26 January, they announced that 33 stores would close, leaving 76 locations. The remaining stores closed shortly afterwards, and the retailer ceased trading at the beginning of 2009. A separate product-safety and insurance dispute affected the brand's later history. Land of Leather had sold Linkwise sofas manufactured in China that contained sachets of dimethyl fumarate, a chemical used to inhibit mould. More than 300 users experienced serious rashes attributed to allergic reactions. Land of Leather's insurer, Zurich Financial Services, refused to pay claims, arguing that the retailer had breached policy conditions. On 18 March 2010, the High Court of England and Wales accepted the insurer's position. The decision meant that purchasers did not receive indemnification from that insurance policy. With the retail chain already closed, Land of Leather remained a defunct brand rather than a continuing operating business.

• 2010

  High Court rules on DMF sofa insurance dispute

  [1]Land of Leatheren.wikipedia.org

  The High Court of England and Wales accepted Zurich Financial Services' refusal to pay under the relevant insurance policy.

• 2009

  Administration begins

  [1]Land of Leatheren.wikipedia.org

  Land of Leather Holdings entered administration on 12 January after failing to secure additional funds.

• 2009

  Store closures and cessation of trading

  [1]Land of Leatheren.wikipedia.org

  Administrators announced the closure of 33 stores on 26 January. The remaining stores subsequently closed, ending the business's trading activity.

• 2008

  Retail network reaches 109 stores

  [1]Land of Leatheren.wikipedia.org

  By December, the company employed approximately 850 people across 109 stores in the United Kingdom and Ireland.

• 2008

  Buyout talks fail to produce a transaction

  [1]Land of Leatheren.wikipedia.org

  Potential buyout discussions briefly lifted the share price, but ended after the proposals were judged to offer insufficient value to shareholders.

• 2005

  London Stock Exchange flotation

  [1]Land of Leatheren.wikipedia.org

  The company floated on the London Stock Exchange in July with assistance from Investec and traded under the symbol LAN.

• 1994

  Land of Leather is founded

  [1]Land of Leatheren.wikipedia.org

  Jerry Briant founded the furniture retailer, which focused on leather sofas and related leather furniture.

A specialist, showroom-led furniture retailer centred on leather sofas and other leather-upholstered household furniture.

• Furniture

  Leather sofas

  Leather sofas formed the retailer's principal merchandise category and the centre of its specialist showroom proposition. Land of Leather sold sofas for residential customers through its United Kingdom and Irish store network. The available reference material does not provide a complete catalogue of models, materials, prices, or specifications.

• Leather sofas

  Linkwise sofas

  Linkwise sofas were products sold by Land of Leather and manufactured in China. Some contained sachets of dimethyl fumarate, a mould-inhibiting chemical associated with allergic skin reactions. The sofas became the subject of claims involving more than 300 users and a subsequent insurance dispute.

• Home furniture

  Leather furniture

  The broader range consisted of leather-upholstered household furniture sold through a specialist retail network. The supplied reference material identifies leather furniture and sofas as the brand's typical products but does not specify the full range of chairs, tables, accessories, or other items.

• 2010

  High Court insurance ruling

  The High Court of England and Wales upheld Zurich Financial Services' refusal to provide insurance cover, accepting that Land of Leather had breached the relevant policy terms. Purchasers were consequently not indemnified through that policy.

  Source

• 2009

  DMF-related Linkwise sofa controversy

  Land of Leather sold Linkwise sofas containing sachets of dimethyl fumarate, a mould-inhibiting chemical. More than 300 users reportedly developed serious rashes following allergic reactions, leading to claims and an insurance dispute.

  Source

Read more

• 2009

  Attempted financing through a new share issueStrategy

  Background

  The company issued profit warnings as consumer spending weakened and the banking market made additional financing difficult.

  Action taken

  Land of Leather planned to raise £15 million through a new share issue.

  Aftermath

  The planned financing did not prevent the company from entering administration on 12 January 2009.

  Planned capital raise. £15 million planned (January 2009)

  Source

• 2009

  Administration and store rationalisationOther

  Background

  Land of Leather could not secure additional funds despite being described as debt free.

  Action taken

  Deloitte appointed joint administrators, who announced the closure of 33 stores while seeking a possible going-concern sale.

  Aftermath

  The remaining stores later closed and the company ceased trading in early 2009.

  Source

• 2008

  Exploration of a buyoutM&A

  Background

  A deteriorating housing market and weaker demand placed pressure on the retailer's performance and finances.

  Action taken

  Land of Leather announced that it was in discussions with several potential buyers.

  Aftermath

  The announcement temporarily increased the share price by 38.5 percent, but discussions ended later in December because the proposals were considered insufficiently valuable for shareholders.

  Source

• 2005

  Public flotationStrategy

  Background

  Land of Leather had expanded as a specialist furniture retailer and sought access to public capital.

  Action taken

  The company floated on the London Stock Exchange in July 2005 with assistance from Investec, using the ticker LAN.

  Aftermath

  The listing supported a large retail network that reached 109 stores by December 2008, but the company later became vulnerable to weakening housing and consumer markets.

  Source

• 2009

  Land of Leather issues profit warnings and considers a share issue[1]Land of Leatheren.wikipedia.org

  Pricing · Other

  Facing weaker consumer demand and restricted access to finance, the company issued profit warnings and planned to seek £15 million through a new share issue.

• 2009

  Land of Leather enters administration[1]Land of Leatheren.wikipedia.org

  Bankruptcy · Leadership change

  Land of Leather Holdings plc entered administration on 12 January after failing to secure additional funding. Deloitte appointed Lee Manning and Nick Edwards as joint administrators.

• 2009

  Thirty-three Land of Leather stores scheduled to close[1]Land of Leatheren.wikipedia.org

  Bankruptcy · Other

  The administrators announced the closure of 33 stores, reducing the estate from 109 stores to 76 while they explored a possible sale as a going concern.

• 2008

  Land of Leather announces buyout discussions[1]Land of Leatheren.wikipedia.org

  M&A · Other

  The retailer disclosed that it was in discussions with several interested parties about a possible buyout. The announcement led to a 38.5 percent rise in its share price, but the talks later ended because they were considered insufficiently valuable for shareholders.

1. 1Land of Leatheren.wikipedia.org