Clothing chain Peacocks last night announced that it would enter administration if a rescue plan to save the business does not materialise in the next few days.
The retailer said that despite efforts to restructure the business “no agreement has been reached” with its lenders and so it has filed an intention to appoint administrators, which gives it some time to conclude an 11th hour deal before its creditors pursue its debt through the courts.
Richard Kirk, CEO of Peacocks, is rumoured to be putting together an offer to take control of the retailer, which could save the jobs of the 13,000 people it employs.
Bonmarché, Peacocks‘ 394-store sub-brand, is already in the process of being sold by professional services firm KPMG, as the trader struggles to deal with its £240 million of debt.
Head of Retail Consultancy at real estate company CBRE Jonathan De Mello says that the atmosphere of heavy discounting across the high street in the run-up to Christmas will have hugely impacted on the profit margins of retailers such as Peacocks.
He also argues that the group is far too store-heavy and that it has found the mid-market sector it operates in increasingly dominated by the major supermarkets.
“Profit is what counts particularly when it comes to retailers with large bank loans to repay, such as Peacocks,” De Mello added.
“The business may well survive in some form, though it would need to be significantly scaled back from its current position, given a number of Peacocks and Bonmarche stores trade in secondary and tertiary centres that shoppers are increasingly bypassing in favour of large city centres or urban malls.”
Further bad news for the retail sector yesterday was the confirmation that memorabilia specialist Past Times had also entered administration, with 46 of its stores closing immediately, costing 574 jobs, and seemingly little hope of finding a buyer for the remaining 51 outlets.
