Jessops On The Brink Of Administration After 79 Years, PwC To Be Appointed As Administrators

UPDATE: Camera retailer Jessops has been placed into administration, with administrators saying store closures are “inevitable”.

Camera retailer Jessops is expected to fall into administration as soon as the end of Wednesday, putting 2,000 jobs at risk.

The high street chain, which was founded in Leicester in 1935, has been in trouble throughout the recession. It narrowly avoided falling into administration in 2009 after it secured a debt-for-equity swap with its lenders HSBC, following a series of profit warnings.

Debt-fuelled over-expansion is often cited as the key problem behind, along with not being able to keep up with the rapid modernisation of digital cameras and associated tools.

Investors, who had seen Jessops' share price fall from 155p at flotation in 2004 to penny-stock status, were wiped out as the bank pushed through a restructuring, which included writing off £34m of debt in exchange for a 47% stake in 2009.

To cap it all off, 2012 saw it lose of two senior figures; Trevor Moore quit as chief executive of Jessops after three years in charge to join HMV and with chairman David Adams also leaving.

There had been hope that the chain could be saved - the Independent reported on 30 April 2012 that HSBC had been in discussions with accountancy firms, such as Zolfo Cooper, about helping Jessops with its financial planning and strategy, but it appears those conversations came to nought.

The bank, which saved Jessops from administration in 2009 via a debt-for-equity swap, is also understood to have gauged the interest of advisers in running a potential sale of the retailer.

Retail Week, which broke the story, reported on Wednesday that PricewaterhouseCoopers has been lined up as the administrator.

The news hasn't come as much of a surprise - but many on Twitter lamented the loss of a high street staple.

The news comes at an interesting time for the insolvency profession, which last month saw business minister Jo Swinson appoint Professor Elaine Kempson from the University of Bristol to lead the review into insolvency practitioner fee charging and whether it offers the best value and fairness for creditors.

Swinson also announced a radical reform to the way complaints against insolvency practitioners are handled by industry regulators. The changes follow extensive negotiations with the regulators and the insolvency profession aimed at reforming the system so that it is more consistent, independent and accessible for complainants.

The review will build on an earlier study conducted by the Office of Fair Trading which responded to concerns expressed by creditors that fees charged by insolvency practitioners do not represent value for money. The reforms are expected to be in place in Spring.

The closure of its retail operation is being blamed on the government's clamp down on the Low Value Consignment Relief (LVCR) - which used to allow items costing less than £15 to be sold to the UK VAT free.

From March 2013, will become a marketplace-only service, allowing customers to sell goods through its site with Play taking a slice, much like eBay or Amazon's marketplace.

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