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.
- 1 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 2 Mother of newborn Baby No 59 trapped in sewer pipe told Chinese police she 'heard crying' when she raised alarm
- 4 Tennis fan suing Australian Open organisers for 'failing to shade spectators' during Murray match
- 5 This crazy skiing video will leave you feeling queasy
Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
AirAsia QZ8501: Black box reveals warning alarms 'screamed' before crash, as more bodies recovered from near fuselage of jet
Rob Lowe hits out at White House decision not to meet Israeli leader
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign
British Muslim leaders outraged after Eric Pickles says followers of Islam should 'prove their identity'
UK terror fears: My jihadist son returned from Syria mentally scarred – now he is being ignored
Nigel Farage: NHS might have to be replaced by private health insurance
Billy Crystal: 'Stop shoving gay sex scenes in my face'
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
iJobs Money & Business
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...
£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...
£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...