Camera retailer Jessops is to appoint administrators for the second time in little more than a year, in a move that puts 120 jobs at risk.
The business, controlled by Dragons’ Den panellist Peter Jones, said it had filed a notice to appoint administrators after being hit hard by lockdown restrictions. The filing temporarily shields Jessops from creditors and gives it breathing space to find a way for the business to carry on, the company said.
The chain, which Jones’s PJ Investment Group bought out of administration in 2013, has been whittled down to just 17 shops. More than half its stores closed after it hit trouble in 2019.
Jessops said it had hired advisors FRP to help it restructure the business, severely impacted by the pandemic.
The notice of intent provides the business with protection for 10 days from existing or pending creditor claims.
The retailer said it planned to continue to trade when lockdown restrictions lift in April.
It is considering a rescue deal in the form of a Company Voluntary Arrangement (CVA), an insolvency process that allows a business to reach an agreement with its creditors to pay off all or part of its debts.
“Jessops is a long-established British brand, but like many others, it has faced growing online competition, as well as the challenges faced by all High Street retailers in operating through the restrictions imposed during the pandemic,” said Geoff Rowley, partner at specialist business advisory firm FRP.
“We are working closely with PJ Investment Group and the wider Jessops management team to consider all options to secure a future for the retailer.”
This is not the first time that Jessops has been in trouble.
In October 2019, a similar notice was filed by the camera chain, and prior to that, Mr Jones bought the chain from administrators in 2013 after it collapsed under £81m of debt.
A CVA can mean that a retailer’s landlords would have to accept a percentage of a shop’s revenue for their rent, instead of relying on a fixed lease.
Jessops is considering a company voluntary arrangement (CVA) – an insolvency process that would enable it to cut its rents. It is also in talks with suppliers and partners. PJ Investment Group is offering to provide additional financial support if management can come up with a sustainable business plan.
A spokesperson for PJ Investment Group said it had worked hard to support Jessops, which had returned to profit in recent years, following a restructuring and multimillion-pound investment. However, they said, the retail business was changing fast “and this process has been accelerated by the impact of the pandemic”.
The process is often used as an opportunity to renegotiate rents.
The High Street has been badly affected by the pandemic, which forced shops to shut their doors during the crucial Christmas and Easter holidays.
The latest data from the Office for National Statistics show retail sales rose 2.1% in February, but were still down by 3.7% on a year earlier, before the impact of the coronavirus pandemic.
Clive Chalkley, partner at law firm Gowling WLG said: “Bricks and mortar retailers have been heavily affected by the ongoing lockdowns.
“Unfortunately for Jessops, which is quite specialist, its products can now be easily acquired online, which will have accelerated the process.”
The company is working with restructuring firm FRP on a rescue plan. However, its stores, including flagships on London’s Oxford Street and in Birmingham, will reopen when government restrictions are lifted next month and the website will continue to trade as normal.