Powerstore fails to find credit deal

Click to follow
The Independent Online
Administrators were appointed at Powerstore, the collapsed electrical retailer, yesterday after the company failed to reach a voluntary agreement with its creditors.

One of the administrators, David Duggins, said: "The businesses have experienced acute cash-flow problems, principally because of intense competition among electrical retailers and the difficult market conditions affecting the sector."

The company was labouring under debts of around pounds 20m and achieved sales of pounds 80m last year. The level of trading losses has not yet been revealed.

The 85 shops, which trade under the Powerstore and Homepower names, were closed to allow the administrators to assess the stock position yesterday but should be open by tomorrow.

The administrators intend to continue trading in all locations while they review the financial and trading prospects. Though some form of informal arrangement with creditors is still possible it is likely that all or parts of the business will be sold. Several expressions of interest have already been received.

The two main trading subsidiaries, Powerstore and Homepower, have collapsed, putting 1,100 jobs at risk. Two other subsidiaries, thought to employ around 200 staff, are not insolvent. They are Power Direct, which offers electricity bill payment services in the company's showrooms, and SuperCare solutions, which offers a warranty repair service.