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Monday, 16 January 2012

Peacocks close to administration

update: 17th January


Both Peacocks and Bonmarche have filed intention to appoint administrators which basically gives them 10 days to sell the business.

Peacocks have been trying to sell the Bonmarche stores in their portfolio as they struggle to stave off administration but according to reports, the Royal Bank of Scotland is reluctant to keep the company going. 

Peacocks owe the banks some £240m, with RBS being the lender most exposed with 17% of the debt.  However, it has been mooted that the overall debts could be much higher.  Talks on saving the business have been going on over the weekend and KPMG has been lined up as the administrators if the talks fail. 

Peacocks has been struggling against competition from the likes of Primark.

High Street names may be worried as RBS is the major lender for a number of well known brands such as HMV and Clinton Cards who are all currently struggling in the economic climate. 

Where a firm owes a significant amount of money to the bank they are in a vulnerable position as the bank, who is a secured creditor, has the power to appoint administrators.

Peacocks has over 550  stores and employs over 10,000 people so this would be the most significant company collapse since Christmas.

In better news Barratts, the shoe retailer, has been rescued in a deal that has saved 1100 jobs but 680 jobs have been lost.

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