Receivers pull plug on Escom

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The Independent Online
Receivers pulled the plug on the failed Escom computer stores yesterday, closing more than 150 shops. The closures bring the total number of job losses at the group to 850 after 260 staff were made redundant last week.

Staff at 113 Escom shops and 43 concession outlets were informed on Tuesday afternoon. The stores closed with immediate effect.

Deloitte & Touche, appointed as receivers to the group last week, took the decision due to a "lack of serious interest" in purchasing the business as a going concern.

No offers were received for the whole group. The receivers also blamed disappointing trading results and the high cost of continuing to trade.

Though as many as four parties had expressed interest in buying parts of the group, it is understood they were interested only in small numbers or in buying stock. Geoff Saunders, Escom's former commercial director, had been expected to mount a management buyout but no offer was made.

Negotiations are continuing with groups interested in buying single stores or small groups. Deloitte could not confirm if Mr Saunders was among the interested parties.

Prior to yesterday's announcement the receiver said it had received 60 expressions of interest with most targeting single stores. Receiver Nick Dorgan said: "It is disappointing that the business as a whole cannot be sold but, given the oversupply in the retail computer market and rapidly declining margins in the sector, it was always a possibility."

Mr Dorgan said discussions were continuing with a number of parties regarding the sale of the property portfolio. This could see a similar property deal to the one last year in which Escom took control of the former Rumbelows chain closed by Thorn EMI.

One of Escom's problems was that it had mostly small stores in high street locations while most electrical retailers are opening large out-of-town superstores. Escom was also trying to sell its little-known own-brand products at a time when the competition among the largest brand name computer manufacturers has been at its most cut-throat.