Clothing retail group Peacocks could be forced into administration this week having yet to agree a deal with its lenders to cut its debt levels, reports revealed at the weekend.
Rumours that the trader had been close to the brink had been circulating since before Christmas but, according to The Telegraph, discussions between Peacocks owners, hedge funds Och-Ziff and Perry Capital, and its lenders such as Barclays and Royal Bank of Scotland were on the verge of breaking down.
Peacocks, which runs over 700 stores across the UK, is hoping to reduce the amount of debt it owes to the banks, thought to be in the region of £650 million.
Administration proceedings could start as soon as today if no deal is achieved, according to The Telegraph, which also claims that a sale for the trader‘s 200-store brand BonmarchÃ© is likely to be concluded early this week.
A source close to the proceedings told The Telegraph: “The banks must decide if there is a deal to be done or not. If not, administration remains a strong possibility.”
Over the last few months Peacocks has been making significant management changes in an attempt to turn flagging sales around, including appointing former Asda CEO Allan Leighton to join the firm as Chairman.
In September professional service firm KPMG was brought in to review the business, amid concerns that lending covenants were being breached by the retailer.