Camera shop Jessops calls in administrators

High Street Retail:

Yet another struggling retailer is looking to close stores, with a possible loss of the company’s 500 employees’ jobs if all the shops were to fold.

Even Dragons Den star and serial business owner Peter Jones, who owns camera shop chain, cannot sprinkle the necessary stardust, it would seem, to make a success of the venture.

Peter Jones bought the Jessops chain with the well known High Street brand name from the administrators himself back in 2013 after the then business collapsed owning creditors around £81m.

Jones has managed to increase sales revenues in most of the years since his own purchase, but the firm’s profits remain stubbornly low as rents have risen, falling to less than £10,000 last year.

It is reported that Mr Jones will now seek a complex rescue deal for the firm’s property arm, JR Prop Limited, a company voluntary agreement (CVA) with its landlords and lenders at a time when empty High Street shops have reached their highest level in the last four years.

This CVA is an insolvency process that allows a business to agree with its creditors how it will pay off its debts, or a part of its debts, and is often an opportunity to close unprofitable shops while retaining profitable ones with renegotiated rents.

The BBC has reported that sources close to the firm think Jones still sees a good future for the business but has given no indication of which shops may close.

Jones’ thinking when taking over was that even though almost every mobile phone incorporates a camera – some capable of taking better photos than a dedicated camera – was that there was still a market for the specialist camera sold through a High Street store and online. However, sales have not met these expectations.

The second administration of Jessops follows a long line of failed High Street retailers with the likes of Maplin, Poundworld and Toys R Us and Debenhams either going down the tubes completely or going through the pre-pack CVA process. A whole host of others have gone through this CVA restructuring process.

With each High Street closure, property values are affected and landlords are put under more pressure to reduce rents.

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