Beales, one of UK’s oldest department store operators, has collapsed into administration, putting around 1,300 full-time jobs at risk across its 23 stores.
The retailer has appointed KPMG as administrators after failing to secure a buyer. There is not expected to be any immediate store closures and the business continues to trade. However, its website is now offline.
Beales put itself on the market in December after facing “exceptionally challenging times”.
Recent reports have suggested that at least two suitors, including another retail firm and a venture-capital investor, had been involved in talks with Beales and its financial advisers. It was also believed to have been negotiating with its landlords to try and agree rent reductions.
Beales was sold in a management buyout to group Chief Executive Anthony Brown in 2018. The retailer has been trying to overhaul its stores and product offering to secure its survival.
Brown used a series of interviews last week to denounce the lack of support that Beales has had from local authorities during discussions about the level of business rates it is obliged to pay. “At the moment, in my view councils really don’t care,” he told the BBC.
“They get their business rates, whether we’re there or not, because the landlord pays if the store closes.”
Beales’ pre-tax losses more than doubled to £3.2m in the year to March 2019 on sales of £48.3m. The business had net debts of nearly £16m.
Earlier reports suggested a slimmed-down version of Beales could get emerge from an administration process.
News of the chain’s potential demise follows another difficult start to the year for the non-food retail sector with John Lewis issuing a profit warning and the remains of Mothercare disappearing from the high street.
Over the weekend, The Sunday Times reported that Hawkin’s Bazaar faces collapse unless a buyer emerges. The toy and gifts retailer, backed by Merino Private Equity, filed a notice of its intention to appoint administrators last week, endangering hundreds of jobs in its 21 stores.
NAM Implications:
- Pro-active NAMs will have already calculated the incremental sales required to replace their lost profits in the event that Beales does not recover.
- i.e. divide your average Beales’ sales outstanding by your net margin and multiply by 100 = incremental sales required.
