Peacocks calls in the administrators as rescue fails
Thursday 19 January 2012
Peacocks, the debt-laden discount fashion chain, collapsed into administration yesterday, leaving about 9,600 jobs hanging by a thread in the retail sector's biggest failure since Woolworths in 2008.
Richard Kirk, the chief executive of the group behind the 611-store chain, had submitted a £60m rescue package on Sunday, with a mystery backer to salvage the 128-year-old retailer.
But the deal collapsed after its 17 banks raised a series of issues – notably on price, which could not be addressed before Friday. As a result, the Peacock Group appointed KPMG as administrator yesterday. Mr Kirk said: "Peacocks is a brand with great heritage, and it is with deep sadness that we have been left with no other option but to today place the business into administration." Peacocks, which also has 49 concessions, will continue to trade while KPMG seeks to find a buyer for the business.
The fashion group's sister chain, Bonmarché, the clothing retailer that employs 3,800, is not in administration.
Bonmarché is poised to be sold to the private equity firm Sun European Partners, possibly in a pre-packaged administration this week. Sun European has teamed up with the restructuring specialist GA Europe, which both declined to comment, for the deal. Sun European is likely to acquire 230 Bonmarché shops, while GA Europe is set to handle the sale or closure of the remaining 164 stores.
Chris Laverty, a restructuring partner at KPMG, said: "Like many retailers, Peacocks has suffered from tough economic conditions, which have seen its customers reduce their spending on the high street. This factor, combined with a surplus of stores and high overheads, led to the business becoming financially unviable in its current form."
However, the fate of Peacocks was largely sealed by the group's debt of £240m, following a highly leveraged buyout in 2006. After its acquistion of Bonmarché in 2002, Peacocks was taken off the stock market in a £420m deal, backed by the hedge funds Och-Ziff and Perry Capital, and Goldman Sachs, four years later. Private equity firms and retail restructuring specialists are expected to be interested in buying Peacocks, as the administration will allow them to ditch its worst stores and debts.
Diving in at the deep end is no excuse for shirking the style stakes
- 1 Why I'm on the brink of burning my Israeli passport
- 2 War is war: Why I stand with Israel
- 3 L'Oreal cuts ties with Belgium supporter Axelle Despiegelaere after hunting trip photographs
- 5 Iraq crisis: How Saudi Arabia helped Isis take over the north of the country
Ian Thorpe gay: Olympic swimmer comes out in Parkinson interview
Death in the Valley of the Dolls: Heroin overdose turns the spotlight on prostitution boom in California's tech industry
Supermoon 2014: When and why will the moon look bigger and brighter this summer?
Woman, 61, jailed for seven years after drink-drive death of cyclist
Gaza-Israel conflict: Pro-Palestinian demonstrators take to streets of London, Paris and New York in wave of protests
Sustained immigration has not harmed Britons' employment, say government advisers
War is war: Why I stand with Israel
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Australia facing international condemnation after turning around Sri Lankans at sea
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
iJobs Money & Business
£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...
£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...
£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...
£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...