Another high street store admits defeat and announces it is to go into administration putting thousands of jobs at risk. We answer five questions on Jessops’ decision to close.
What reason has Jessops given for its planned closure?
The high street camera store says it is being forced into closure after leading camera makers, such as Canon and Nikon, have tightened the terms on which they sell products to the company following a downturn in the market.
Unless Jessops can whip up a deal with suppliers the company said closure by the end of the week would be inevitable.
Companies that supply Jessop are said to be concerned about the state of the electrical sector after the collapse of Comet last year, plus Jessops failed to increase its 2012 sales from the previous year.
How many jobs will be sacrificed in Jessops closure?
In its 192 stores Jessops employs about 2,000 staff who will all lose their jobs if stores close.
However, those who are members of the Jessops’ pension scheme are said to be protected because it was adopted by the Government’s Pension Protection Fund (PPF) in 2009.
Who else will be a loser?
HSBC who co-own the company because the bank stands to lose £30 that Jessops owes HSBC. In total Jessops is estimated to have debts of £60m, including £30m of trade debt and the HSBC debt.
HSBC tried to strike a deal with suppliers to ease Jessops’ financial burden but to no avail.
What has Jessops’ spokespeople said about the company’s closure?
Rob Hunt, joint administrator and partner at PricewaterhouseCoopers who have been appointed as administrator of Jessops, told the BBC: "Our most pressing task is to review the company's financial position and hold discussions with its principal stakeholders to see if the business can be preserved.
"Trading in the stores is hoped to continue today but is critically dependent on these ongoing discussions. However, in the current economic climate it is inevitable that there will be store closures."
It’s not a good start to 2013, who could be next?
It’s hard to say, but online entertainment retailer Play.com succumbed on Wednesday; the second biggest casualty of 2013. The retailer will make more than 200 redundancies.
Although there is no suggestion of closure, Marks and Spencers reported a 1.8 per cent drop in like for like trading figures in the 13 weeks to 29 December on the same period a year earlier.
Last year casualties included Comet, Clinton Cards, JJB Sports and Game Group.