Jessops has become the latest victim of the coronavirus pandemic after filing a notice to appoint administrators for the second time in just over a year.
The camera retailer, which employs 120 staff members across 17 stores, said it had taken on advisors FRP to help it restructure the business after being hit by a series of national lockdowns in the UK.
It is owned by Dragons’ Den star Peter Jones, via PJ Investment Group, who bought the chain from administrators in 2013 after it collapsed under £81m ($111m) of debt.
The notice of intent gives the company protection for 10 days from existing or pending creditor claims. It filed a similar notice in October 2019.
Jessops, which is mulling a rescue deal in the form of a company voluntary arrangement (CVA), plans to continue trading when lockdown restrictions lift next month.
A CVA is a formal agreement between a business and its creditors which gives firms the chance of recovery.
It sets out how repayments of company debts should be made to creditors and can deliver a better outcome than an administration or liquidation. After 14 days creditors are asked to vote and at least 75pc must agree.
CVAs have become increasingly popular over the last few years as Britain’s high street suffers from declining footfall, increased business rates and the rise of online shopping. The coronavirus pandemic has only heightened the issues retailers are facing.
Last year the British Property Federation (BPF) warned that retailers are “weaponising” CVAs as part of a bid to cut costs. It said that the restructuring technique is being abused and landlords are suffering as a result.
Due to the enforced closure of non-essential shops in Britain, all of Jessops’ stores are closed, including its flagship London and Birmingham sites.
A spokesman for the business said: “No doubt, that will include further growing Jessops’ digital offering, as well as considering the opportunities to partner with other retailers to continue Jessops’ high street presence.
“We are working closely with key suppliers and partners to agree a way forward and PJ Investment Group have confirmed that they stand ready to provide additional funding if a suitable agreement can be reached on sustainably supporting Jessops in the next stage of its development.”
Geoff Rowley, partner at specialist business advisory firm FRP, said: “Jessops is a long-established British brand, but like many others, it has faced growing online competition, as well as the challenges faced by all high street retailers in operating through the restrictions imposed during the pandemic.
“We are working closely with PJ Investment Group and the wider Jessops management team to consider all options to secure a future for the retailer.”
It comes after official figures published by the Office for National Statistics (ONS) on Friday revealed that retail sales rebounded slightly in February as Brits spent money on home improvement projects and lawn furniture in preparation for easing lockdown restrictions.
UK retail sales rose by 2.1% last month, in line with forecasts. February's sales were boosted by strong demand for household goods. Sales in this category rose by 16%.
The ONS said there was "anecdotal evidence" this rise was caused by demand for "DIY products as consumers continue to improve their homes during lockdown" and demand for outdoor furniture "in preparation for the easing of lockdown restrictions, particularly the ability to meet friends and relatives in private gardens as the weather improves."
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