Administrators PwC kick off its attempts to find a buyer for the 192-store business but admits store closures are inevitable
Up to 2,000 jobs are at risk at the troubled high-street camera chain Jessops after the retailer became the latest high profile victim of the great recession and collapsed into administration on Wednesday.
PricewaterhouseCoopers has kicked off its attempts to find a buyer for the 192-store business but admitted that at least some stores would close adding to a string of closures last year following the collapse of high street names including Comet, JJB Sports, Game, Peacocks and Blacks Leisure.
Rob Hunt, joint administrator and partner at PwC, said Jessops had called in the accountants after last ditch talks between directors, funders and key suppliers on financial support for the business had ended in “irreconcilable differences.”
A statement issued by PwC said that Jessops had suffered as British shoppers remain cautious amid the UK’s economic troubles while the chain’s core camera market was in decline. However, PwC said it was hopeful of finding a buyer as Jessops had “a well-known brand, strong reputation for service and a significant national footprint.”
Jessops has suffered from years of uncertainty, managing to avoid administration in 2009 by securing a debt-for-equity swap with its lenders HSBC which wiped out shareholders. The bank now owns 47% after agreeing to write off £34m of debt, with another 33% of the shares owned by the company’s pension fund and the remaining 20% held by an employee benefit trust. In 2010, then chief executive Trevor Moore said: “I don’t think it gets much more secure than being 47% owned by HSBC. They are committed to a long-term plan for Jessops – it is not about a quick turnaround or spin-out.”
The company achieved sales of £236m in the year to December 2012 but has not managed to trade profitably in any year since HSBC took its stake and it reported a £909,000 loss in its last published accounts for the year to 1 January 2012.
The group’s woes were compounded last year when Moore quit to join HMV as its chief executive last year, while chairman David Adams also left. The company did not appoint a replacement for Moore, instead hiring Martyn Everett as chairman and promoting Neil Old to lead the business as chief operating officer.
The UK high street is increasingly being hit by the UK’s stuttering economy. In October, research showed that retail chains were accelerating store closures with an average of 20 stores a day shutting their doors in the first six months of 2012. A net total of 953 stores (openings minus closures) closed in the first six months of the year, compared with 174 in the whole of 2011, according to the report.