Courts stays closed as customers count the cost

Courts stores across the country will remain closed today as the crisis-hit furniture retailer starts the process of administration, with 2,500 jobs at risk and thousands of customers facing uncertainty over recent purchases.

Courts stores across the country will remain closed today as the crisis-hit furniture retailer starts the process of administration, with 2,500 jobs at risk and thousands of customers facing uncertainty over recent purchases.

Mick McLoughlin and Chris Laverty of KPMG Corporate Recovery were appointed joint administrators yesterday afternoon. "Courts has suffered from an increasingly competitive UK marketplace and tight margins," said Mr McLoughlin.

Customers who have paid deposits by cash or cheque are thought unlikely to get their money back. Those who had paid for deposits by debit cards in the past few days were being urged tocancel the transactions with their banks, to try to recoup their money.

However, people who have paid by credit card should be able to receive a refund for any outstanding deposits if the goods have yet to be received. "We will be writing to customers who have paid deposits for goods not received," Mr McLoughlin said. "Those customers who have paid deposits by credit cards should contact their card provider as they may be able to obtain a refund direct from them."

Barclaycard is the "acquiring bank" for Courts, which means it has processed the retailer's credit-card transactions. A spokesman for Barclaycard said yesterday that there were security agreements in place with Courts and that its lending banks would provide protection for consumers paying by credit card.

Courts' 88 furniture retail outlets have had their doors locked and will remain shut while KPMG undertakes a stock-take. It hopes to re-open the stores in the next few days and will then seek buyers for the sites. It is thought that KPMG will consider selling the larger sites piecemeal with the rump possibly being sold off to private equity or trade buyers. It operates 22 high-street stores and 66 superstores throughout England and Wales.

Courts, which traces its history to 1850, has suffered from losses over the past few years and has failed to complete a restructuring of its operations. Despite a £20m lifeline from its banks in June, the company's shares were suspended on Monday after its 24-strong banking syndicate refused to provide any more cash.

KPMG stressed yesterday that the administration affected Courts Plc and Courts (UK) alone. It does not include Courts Overseas, Courts Group International, Courts World Wide Purchases or any of Courts' overseas operations. These have separate boards, management, suppliers and funding, and will continue to trade as normal.

KPMG has a customer and shareholder information sheet at www.courts.co.uk and a helpline number for both groups on 0870 950 1333.