The company, which was only formed three years ago, is the latest in a string of casualties in the cutthroat electronic retailing sector, which has seen names such as Rumbelows disappear and most electricity companies abandon their retail experiments.
Powerstore's application to go into administration will be heard at a court in London at noon today. The accountants Arthur Andersen will be appointed administrators. Although the 33 out-of-town superstores should attract a buyer, there is unlikely to be much interest in the 52 smaller high street shops.
Trade Indemnity, the credit insurance group that has been representing some of the company's insured creditors, has asked the accountants KPMG to review Powerstore's business plan. Although some creditors have been supportive, a voluntary agreement had not been reached last night. Only a last-ditch lifeline from creditors would help the company avoid administration.
"Clearly whatever support there was from creditors was not 100 per cent," a spokesman said.
Like many others in the electrical retailing sector, Powerstore has been hit by fierce competition and over-supply in the market. The company's accounts for the year to December 1995 are being audited at the moment and are likely to show a trading loss. Sales are around pounds 120m. The company's debts have not been disclosed.
In the 16 months to September 1994 the group recorded profits of pounds 1.1m on sales of pounds 31.5m. However, the Homepower business lost pounds 12m in its first 18 months' trading.
Powerstore was unable to fully meet its rent and other liabilities in March and applied to go into administration on 12 April. The administrator could seek a postponement of rental payments to landlords.
Powerstore was formed in May 1993 to acquire 16 stores from London Electricity. Led by the former Dixons director Clive Vlotman, the company expanded last year with the acquisition of Homepower, the retail joint venture of East Midlands and Yorkshire Electricity.Reuse content