Major British kitchen company collapses into administration with more than £1million in debts as 18 jobs lost

A Scottish kitchen company has collapsed into administration with debts of more than £1million after trading for 25 years.

Merchant City Distributors Limited, based in East Kilbride, ceased trading in April, resulting in the loss of all 18 jobs.

The business specialised in supplying, distributing and installing gas and electrical products.

Joint administrators James Stephen and Ben Peterson of BDO have now published their first report, revealing the full scale of the company’s financial difficulties.

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Unsecured creditors are owed £1,064,122 and are not expected to receive any payment.

HM Revenue and Customs (HMRC) is owed around £214,000, while appliance manufacturer Electrolux is the largest creditor with a claim of £780,330.

Trade creditors are collectively owed £283,784, and BDO has so far received claims totalling £896,873.

“We do not anticipate a dividend payment to unsecured creditors,” the administrators said.

All 18 employees were made redundant when the company entered administration, with former staff holding preferential claims for unpaid wages, holiday pay and pension contributions.

The report states the business suffered significant supply‑chain disruption that ultimately proved fatal.

Directors concluded there was no sustainable future for the company as cash flow problems prevented it from completing deliveries of existing stock both before and after entering administration.

BDO said it explored whether remaining stock could be delivered in the run‑up to insolvency or during the early stages of administration, but this was “hampered by a lack of cashflow”.

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Although the supplier offered some flexibility on new stock purchases, the business could not generate enough cash to meet ongoing commitments.

James Stephen said: “The challenging business environment impacted the company’s ability to trade, and the directors unfortunately saw administration as the only option.”

The report also lists several smaller businesses left out of pocket, including REKK Recycling Limited in Uddingston, owed £6,700; Hebrides Haulage on Lewis; and Holland House Electrical in Glasgow, each owed around £1,000.

The administrators concluded that persistent supply‑chain disruption, failed supplier negotiations and severe cashflow pressures left directors with no viable alternative but to place the company into administration.

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