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30 June 2020, 12:13 | Updated: 30 June 2020, 15:56
The owner of the Harveys furniture chain and Bensons for Beds is to be broken up in a financial restructuring that will save at least 1,900 retail industry jobs that were left hanging in the balance by the COVID-19 crisis.
Sky News has learnt that Bensons is to be bought back by its existing owner, Alteri Investors, through a pre-pack administration that is expected to be confirmed within hours.
Between 150 and 175 of Bensons' stores are expected to remain open under its revamped ownership, meaning that roughly 50 will close permanently following the deal.
Blue Group, the chain's parent company, formally appointed PricewaterhouseCoopers as administrator on Tuesday, with the fate of furniture retailer Harveys hanging in the balance.
In total, the group employs around 3,000 people, meaning more than 1,000 employees have yet to be given assurances about their future.
In a memo to staff seen by Sky News, Blue's chief executive, Mark Jackson, wrote that it had had to "take immediate action to ensure the part of our business with the brightest prospects can rebuild as we emerge from COVID-19".
Under the pre-pack with Alteri, Bensons will become a standalone, vertically integrated business with the group's bed manufacturing operations sitting within the new company.
A source close to the process said that Alteri would inject a further £25m of funding into the company to invest in technology, while all customer orders with Bensons and Harveys would be fulfilled.
Bensons for Beds, which was founded in the 1950s, is the largest bed retailer in the UK by store number and the second-largest, behind Dreams, in terms of market share.
The two chains were acquired by Alteri only a few months ago, with the investor's chief executive, Gavin George, saying that it was "excited to support Mark [Jackson, the chief executive] and the team on a successful turnaround of the business".
Blue Group had been owned by Steinhoff International, the troubled South African retail holding company, since 2005.
Alteri declined to comment on Tuesday.
(c) Sky News 2020: Coronavirus: 1,900 jobs saved but 1,000 at risk in Bensons pre-pack