News In Depth
Series of big-name retail failures
A run of some of the highest profile retail collapses since the demise of Woolworths in 2008 has deepened the crisis for Britain's high streets.
The biggest failure of recent months was the demise of consumer electronics chain Comet, resulting in the loss of 6,900 jobs after administrator Deloitte closed all the stores without finding a buyer.
Others to go into administration in recent months have included sports retailer JJB Sports, the outdoor retail chain Blacks - later rescued by JD Sports Fashion for £20 million - and budget fashion chain Peacocks, which saw 388 of around 600 stores saved in a deal with Edinburgh Woollen Mill.
Gift retailer Past Times was another to go under in a new year rush of failures at the start of 2012. The post-Christmas period has been even worse this year after camera retailer Jessops also closed last week.
According to recent figures from the British Retail Consortium (BRC), more than one in 10 shops were empty in October.
The BRC said the UK town centre vacancy rate of 11.3% was the worst figure since its survey began in July 2011, with Northern Ireland, Wales and the North & Yorkshire region seeing record numbers of empty shops.
As well as structural issues such as competition from internet retailers and supermarkets, the failure of chains such as HMV and Comet also highlights the pressure on shoppers from higher energy bills and fuel costs.
In the case of Comet, it was knocked by the lack of first-time home buyers, who had been key customers for the electricals business.
And as banks have become more cautious over debt-for-equity deals since the financial crisis, many firms saddled with debts from past private equity takeovers have been left to fail despite underlying good trading.
Recent failures have included:
:: JJB (October)
The failure of the sports retail chain caused around 2,200 staff to lose their jobs after administrators were only able to secure a sale of 20 stores. More than 130 stores were shut after KPMG failed to find a rescue buyer for the entire business. Mike Ashley's Sports Direct International bought 20 stores, the brand and its website for £23.8 million. But the deal was only able to protect 550 jobs and also spelt the end of the JJB brand on the high street, with the Sports Direct group planning to convert all stores. KPMG said the cash and restructuring needed to save the business was too much risk for potential buyers. Once the UK's biggest sports retailer, JJB's demise sent shockwaves through the high street and came after numerous efforts to save the business.
:: Clinton Cards
Clinton Cards was one of last year's major high street victims, with nearly 3,000 full and part-time staff left without jobs after administrators Zolfo Cooper announced the closure of 350 stores. But there was some good news for the chain after Ohio-based American Greetings bought 397 stores and saved 4,500 jobs. The rescue deal also secured the Clinton Cards brand, which was founded by chairman Don Lewin in Epping, Essex, in 1968. Clinton had made losses of £130 million since 2004 and was hurt by a slump in retail spending, as well as increased competition in the greetings cards market.
:: Game Group
Video games retailer Game Group was hit by falling sales and a refusal by suppliers to stock the business. The group, which traded as Game and Gamestation, appointed PwC at the end of March, triggering the immediate closure of 277 stores in the UK and Ireland - leaving 2,104 staff without a job. But Game was given a second chance when the brand and remaining 333 shops were bought out of administration by turnaround specialist OpCapita, saving nearly 3,200 jobs. While electricals chain Comet did not fare so well under OpCapita's wing, Game appears to be turning the corner.
Jessops was the first high-profile retail casualty of 2013 after suffering from online competition and a boom in camera phones in recent years, which hit demand for digital cameras. Administrators from PricewaterhouseCoopers closed all shops in the chain with the loss of 1,370 jobs. Jessops had struggled since 2007, when it underwent a major overhaul with a swathe of store closures. It came close to collapse two years later before being rescued by its main lender HSBC in a controversial debt-for-equity swap that saw it taken off the stock market.
Deloitte, which was appointed to run the electricals retailer in November, closed the final stores just before Christmas, having failed to find a buyer for any of the 235-strong estate. The collapse cost a total of 6,895 jobs. With insufficient funds raised from the winding down of the chain, the Government will have to pick up the tab for £23.2 million of outstanding redundancy pay, accrued holiday pay and pay in lieu of notice. And a further £26.2 million has been lost in unpaid tax to HM Revenue & Customs. A report from Deloitte showed the investment vehicle put together by American Henry Jackson of OpCapita, which raised funding from unnamed investors for Comet's takeover from Kesa Electricals, was expected to recoup just under £50 million as a secured creditor.