Jessops has become the first high street casualty of 2013, collapsing into administration yesterday and leaving 2,000 jobs hanging by a thread.
The camera store chain, which has 192 stores, called in the accountancy firm PricewaterhouseCoopers after its trading worsened at the end of last year and HSBC, its main lender, called time on any lingering hopes of a turnaround.
There had been speculation that one or more of its suppliers, such as the camera makers Canon or Nikon, would invest in the 77-year-old retailer to keep it going, but PwC said its core market had seen a "significant decline" in 2012 and this was forecast to continue this year.
Rob Hunt, the joint administrator at PwC, said crisis talks in recent days involving directors, lenders and key suppliers had "not been successful". The administrators also warned that store closures were "inevitable" and that industry experts believed they were unlikely to find a buyer, although other retailers will want to buy Jessops' best stores.
Jessops will not honour customer vouchers or accept returned goods, dealing a blow to many who received gift cards or presents over Christmas.
The company, founded in Leicester by Frank Jessop in 1935, has been hit by the inexorable shift to online shopping and to smartphones with in-built cameras. The chain made a loss of £5.2m in the year to January 2012.
Jessops' administration follows the collapse of 194 retailers last year, including JJB Sports, Peacocks, Blacks Leisure, Clinton Cards, Game Group, and La Senza, Comet and Past Times.
Its demise will surprise few in the industry, as it has continued to lose money and avoided administration in 2009 only by implementing a painful debt-for-equity swap which saw HSBC take a 47 per cent stake. This led to Jessops delisting from the Stock Exchange in January 2010. HSBC wrote off £34m of loans. but left the retailer carrying debt of £20m, according to Retail Week Knowledge Bank. Jessops' final-salary pension fund, which has been closed to new staff since 1997, also ended up owning a third of the retailer.
PwC said it hoped the chain could continue trading, but "in the current economic climate it is inevitable that there will be store closures", in more pain for the High Street.Reuse content