Adams is latest retailer to face administration
Monday 29 December 2008
Childrenswear chain Adams is on the brink of collapse and is expected to appoint the accountancy group PriceWaterhouse Coopers as administrator within the next week.
The company, which employs around 2,000, has 260 shops in the UK and 116 overseas, and supplies clothes for Boots. It will continue to trade while a buyer is sought, but any new owner is expected to close at least a fifth of its outlets.
Adams reportedly owes £10m to the Bank of Ireland and another £200m to John Shannon, the retail tycoon who owns 100 per cent of its shares. Mr Shannon, who made his fortune from the Stead & Simpson shoe shops, spent £15m rescuing Adams from collapse less than two years ago. But his restructuring of the group, which was bearing fruit, was not enough to withstand the recent sharp decline in high street sales.
Adams is just the latest retailer to bear the brunt of depressed consumer spending. In the last week alone Whittard, the tea and coffee chain, and Officers Club, a menswear outlet, went through "pre-pack" administration processes and found new owners. Zavvi, the music and DVD seller that used to be Virgin Megastore, was also forced to look for a buyer after going into administration on Christmas Eve, blamed on a combination of stuttering sales and supply problems caused by the collapse of Woolworths. Allied Carpets, the UK's second biggest flooring seller, was also put up for sale last week, after its French owner – controlled by the Mulliez family – wearied of supporting the loss-making business.
A dozen retailers have already gone bust this year – including SCS, MFI and Woolworths – and Adams is unlikely to be the last to go. Experts from Begbies Traynor, the corporate recovery specialist, warned last week that up to 15 chains could fail within the next month.
Some shops slashed prices by as much as 90 per cent to try to lure wary shoppers into Boxing Day sales. But while footfall reached record levels, and some early indications were that sales were also high, experts warn of little lasting impact.
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