Debt-laden value clothing retailer Peacocks has hit the buffers after a last ditch attempt by chief executive Richard Kirk to save the business failed.
The administration of Peacocks, which is saddled with around £240m worth of debt, puts 9,600 jobs on the line and is one of the biggest retail collapses since Woolies hit the wall in 2008.
KPMG has been appointed administrator.
KPMG said it is trading the company while “actively seeking a buyer for the business as a going concern”. It said all stores are continuing to operate as usual. No stores have been closed and there have been no immediate redundancies today.
Retail Week understands Peacocks is now likely to attract renewed interest from potential buyers due to its large debt pile being wiped out.
Peacocks’ sister chain Bonmarche has not entered into administration.
Chris Laverty, joint administrator and restructuring partner at KPMG, said: “Like many retailers Peacocks has suffered from tough economic conditions, which have seen its customers reduce their spending on the high street.
“This factor, combined with a surplus of stores and high overheads, led to the business becoming financially unviable in its current form.”
Richard Fleming,joint administrator and UK head of restructuring at KPMG, said: “We are actively seeking a buyer for the 611 stores and 49 concessions and encourage interested parties to get in touch.”
Barclays, one of Peacocks’ banks, remains supportive of the business despite the administration.
A spokesman said: “This is not the end for Peacocks, there is a viable business here and our support continues”.
Kirk, backed by a secret investor, attempted to negotiate a deal with the company’s 17 creditors in a meeting this morning. However it is understood the anonymous backer pulled out of talks, derailing the negotiations.
It is understood Kirk is unlikely to mount another bid for the chain.
Meanwhile private equity firm Sun European is expected to rescue Peacocks’ sister chain Bonmarche. However, the deal is likely to result in the closure of up to half the 397-store portfolio, Retail-Week.com revealed today.
Restructuring specialist GA Europe is understood to be assisting Sun European on the deal, although the details of the relationship are not clear.
Peacocks’ administration has moved quickly following a collapse in talks last week when one of its key creditors, RBS, walked away.
On Monday notices of intent to appoint administrators were issued for both Peacocks and Bonmarche on Monday, while on Tuesday it emerged that Kirk was spearheading negotiations with a still-unnamed backer.