Its that time of year again when the quarter's rent is due and it looks like a couple of larger retailers are feeling the pressure.
Collectables, the gift retailer which has 11 stores and employs 200 staff, has entered administration
administrators at KPMG have been appointed. The firm has retail units across the North East. So far the administrators have made 25 people redundant in the head office and closed the shops. However the staff at the shops have not been made redundant as yet as the administrators have said the situation is "uncertain"
Jonny Marston at KPMG said: "Sustained difficult trading conditions have resulted in the business facing cash pressures with a further increased demand for working capital in preparation for the Christmas trading period.
So this looks a bit like a cash crunch, maybe creditors being very aggressive but there is a possibility of extra funding very close. Normally in these situations it would pay to file a notice of intention to appoint an administrator to stop legal actions. However it would appear that in this instance stopping trading immediately was a priority to avoid the situation for creditors getting worse or possible accusations of wrongful trading. Without knowing the full situation this is really just speculation. The looming rent bill of course was a crucial factor. KPMG are very rescue minded having done several high profile CVAs so it will be interesting to see what the outcome is.
The administrators said; "We are now assessing the company’s financial position and the options available, whilst marketing the business and assets for sale."
The company operates from 13 leasehold stores and owns a freehold store in Alnwick. It was founded when Philip Lewis began trading small collectable gifts from a barrow in the Metro Centre in Gateshead.
If you are a retailer based in the North East please do not hesitate to contact our Gateshead office where Eric Walls and the team can offer advice on all the options.
If you are a worried employee then please refer to our help for employees pages at http://www.companyrescue.co.uk/company-rescue/guides/redundant-employee