Department store chain Beales, one of the UK’s oldest retailers, on Monday confirmed that it had gone into administration, putting more than 1,000 jobs at risk.
The privately owned company said it had appointed KPMG to oversee the process, and that it had terminated its search for a buyer.
While there are no plans for immediate store closures or lay-offs, it is thought that a scaled-down operation could emerge from the administration process.
Founded in Bournemouth in 1881, Beales has 23 department stores in England and Scotland, and is owned by veteran retailer Tony Brown.
The department store chain has around 1,050 people on staff, a total that does not include contractors.
KPMG said on Monday that it will continue to operate all 23 stores “as a going concern” while it assesses the business.
“All members of staff have been retained by the joint administrators to assist in trading the stores,” it said.
The retailer filed a notice signalling its intention to appoint insolvency practitioners 10 days ago.
Brown completed a management buyout of Beales in October 2018. In December, Beales appointed accountancy firm KPMG to complete a strategic review of the company and to examine refinancing and funding options.
“We are confident that we have a solution for the business that will create a stronger if leaner Beales. It is difficult trading on the high street. The difficulties are exacerbated by the lunacy of the business rates system,” Brown said earlier this month.
KPMG said the strategic review “did not secure any solvent solutions” for Beales and that, as a result, “the directors took the difficult decision to place the companies into administration.”
“For over a hundred years, Beales has been a stalwart of the high street in market towns up and down the UK, but like countless similar retailers, has found trading in recent times to be incredibly tough,” said Will Wright, a partner at KPMG, on Monday.
“With the impact of high rents and rates exacerbated by disappointing trading over the Christmas period, and extensive discussions around additional investment proving unsuccessful, there were no other available options but to place the company into administration,” he said.
Gift vouchers, customer deposits, and customer returns and refunds will continue to be honoured, Wright noted.
Beales has stores in the following towns and cities:
Tens of thousands of employees in the sector lost their jobs in 2019, while behemoths like Sir Philip Green’s Arcadia Group underwent restructuring and closed stores across the country.
Retail sales unexpectedly declined in December, meaning that neither Christmas nor prime minister Boris Johnson’s emphatic election win were enough to boost the ailing high street.
The retail sector is currently experiencing the longest stretch of weakness since sectoral records began in the 1970s.
Compared with November, retail sales declined by 0.6% in December, even though analysts had expected growth of 0.5%, according to official data from the Office for National Statistics (ONS) released on Friday.