HSBC puts its own man into Jessops as downturn bites

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The Independent Online

HSBC has installed a chief restructuring officer at Jessops as fears grow that the debt-laden camera retailer could become the next high-street casualty of the recession.

The hiring of Alan Fort, a specialist retail consultant, comes ahead of a crucial Jessops shareholders' meeting next week about safeguarding its future. Mr Fort is a former chief executive of the defunct furniture retailer Courts and was previously a director at Neal's Yard and Celebrations Group.

Jessops, which has 230 stores, is battling tough trading and labouring under debts of nearly £60m. It made a pre-tax loss of £50.2m for the year to 30 September 2008.

On Tuesday, the company will hold an extraordinary general meeting following its annual meeting. Last week, Jessops said the EGM had been convened for the purposes of considering "whether any, and if so what, steps should be taken to deal with the situation in regards to the fact that the net assets of the company are less than half of its called-up share capital".

The following day, Jessops and rival UK retailers face a second-quarter rental payment amounting to millions of pounds, but it is unclear whether this has had any bearing on the timing of the EGM.

On 30 January, Jessops warned of an imminent breach of its banking covenants, following widening losses and like-for-like sales down by 6.5 per cent for the year to 30 September. Its underlying sales grew by 3.8 per cent for the eight weeks to 25 January, driven by hefty discounting.

Jessops is understood to be considering a possible debt-for-equity swap with HSBC. The bank already holds Jessops warrants, which give HSBC the right to buy 15 per cent of the retailer's shares. Jessops confirmed the hiring of a chief restructuring officer. HSBC refused to comment.

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