Camera chain Jessops is facing an uncertain future as owner Peter Jones is set to call in administrators.
There are 46 Jessops stores across the UK.
Jessops closing down?
Sky News reported that JR Prop Limited, who manages Jessops’ leasehold property estate, has filed “a notice of intention to appoint ReSolve, a restructuring advisory firm, as administrator”.
It’s believed that Mr Jones is looking to arrange a deal with creditors to shut unprofitable sites and to lower rents across the chain.
Last year alone, according to the BBC, the business saw rent costs increase to £4.7m from £4.4m.
This isn’t the first time that Jessops has faced administration.
In 2013, the company collapsed after it amassed £81m of debt, but was saved by Dragon’s Den star Peter Jones, who bought the chain from administrators. At that point, all 187 stores had been closed and 1500 people had lost their jobs.
Mr Jones relaunched Jessops two months later, rehiring many of the chain’s former members of staff.
Are jobs at risk?
The future of the 500 members of staff employed across all Jessops locations is uncertain.
The company has 46 locations across the UK, although the number of stores and which ones might be closed has remained unspecified.
What happens when a company goes into administration?
If a company or LLP is in debt and cannot pay the money it owes, then the owner can put it into administration.
A licensed insolvency practitioner (IP) will then be appointed as administrator and will analyse the company’s affairs in order to identify the best path going forward.
When a business finds itself in financial distress and goes deep into debt, creditors are likely to take legal action in order to recover their money.
Going into administration gives the company protection from legal action, and can give them time to plan moving forward.
According to Begbies Traynor, a licensed insolvency practitioner, the administration must achieve one of these three outcomes when the administration period comes to an end:
- Rescue the company as a going concern
- Achieve a better return for creditors than if the company had been liquidated
- Repay one or more secured or preferential creditors