This article was written by Rupert Neate, for The Guardian on Wednesday 18th January 2012 19.15 UTC
Peacocks, the budget fashion chain, has fallen into administration, putting 9,600 jobs at risk, after a management buyout deal collapsed at the last minute.
The collapse of Peacocks, which boasts designs by singer-songwriter Pearl Lowe, is the biggest retail failure since Woolworths went bust in 2008 with 27,000 redundancies.
Richard Kirk, chief executive and 30% shareholder, had been attempting a rescue deal with the backing of a mystery figure described as “one of the biggest names in British high street retailing”, but the deal fell apart early on Wednesday morning.
It is understood the deal would have forced Peacocks’ 18 lenders, including the Royal Bank of Scotland, to forgo most of the roughly £600m the retailer owed them. Peacocks had been fighting for survival since talks on a complex debt-for-equity swap broke down at the weekend.
KPMG, which was appointed administrator on Wednesday night, said all Peacocks’ 611 stores and 49 concessions would be kept open while it looks for a buyer. Richard Fleming, joint administrator at KPMG UK, expected “considerable interest” and was “hopeful a big chunk of the business” would be sold. There will be no immediate redundancies, but Fleming said there would “inevitably” be big job losses to come.
“Peacocks is a brand with great heritage, and it is with deep sadness that we have been left with no other option but to place the business into administration. We have worked tirelessly over the past year to agree a new financial structure to take the business forward in the current tough retail environment, including seeking new investment for the business,” he said. “This is a hugely sad development for all of our stakeholders, especially our employees who have shown total commitment to the business over an uncertain and difficult period.”
RBS and Barclays said they would continue to support Peacocks. A spokesman for RBS said: “We supported the proposed transaction and are disappointed the deal could not be concluded. Since the bid came in on Sunday night, we have worked around the clock to try to achieve a positive outcome.”
Peacocks is still in talks to sell its plus-sized womenswear business Bonmarché, which employs 3,800 people, to private equity firm Sun European via a pre-pack administration. Bonmarché filed a notice of intention to appoint administrators on Monday but this allows 10 working days to secure a deal before the appointment of administrators.
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