High street clothing chain Peacocks has gone into administration, putting many of its 9,400 employees at risk of redundancy.
The retailer had tried without success to restructure its £240m debts, leading to administrators from KPMG taking over the running of the company. The administrator said it is actively seeking a buyer for Peacocks as a going concern.
Chris Laverty, joint administrator and restructuring partner at KPMG, observed: ‘Like many retailers, Peacocks has suffered from tough economic conditions, which have seen its customers reduce their spending on the high street.
‘This factor, combined with a surplus of stores and high overheads, led to the business becoming financially unviable in its current form.’
KPMG has had a busy few weeks, including the administration of outdoor goods seller Blacks, lingerie retailer La Senza and gift shop Past Times. Peacocks staff are expected to hear this week which of them are at risk of redundancy.
Bonmarché continues to trade
The Bonmarché chain, owned by The Peacock Group, has not entered administration. Bonmarché, which employs approximately 3,800 people, scored one of the highest scores in our survey of clothes and shoe retailers. Bonmarché scored 74%, not far behind the leaders John Lewis, Fat Face and Clarks on 77%, 77% and 75% respectively.
In the same survey, Which? members gave Peacocks an above-average 70%, well ahead of bottom-scoring Mamas & Papas and TK Maxx on 58%.
Need for savings and protection insurance
Which? credit and protection expert Martyn Saville commented: ‘This move by Peacocks is clearly very worrying news for the 400 staff members in Cardiff and 9,000 nationwide, many of whom won’t have protection insurance in place should the company go under.
‘In the current economic climate, it’s worth reviewing how you would survive if you lost your job or were unable to work due to illness or accident. Too many of us just don’t have a safety net of protection insurance or savings.’
Bad news for consumers with gift cards
He continued: ‘We’ve been told by KPMG that, unfortunately, gift cards and vouchers will not be accepted by Peacocks’ administrators. Voucher holders will count as unsecured creditors, meaning they can complete a form to submit their claim (available on the Peacocks website) but are unlikely to see more than a nominal return. Gift cards aren’t covered by the Financial Services Compensation Scheme (FSCS) either.’
Furthermore, goods sold before the appointment of the administrators cannot be refunded or exchanged, although you may have an unsecured claim against the company if the goods are defective.
Defective goods sold after the appointment of administrators may be exchanged provided they are returned within 14 days of sale, with the original receipt.
Find out more about your rights if a retailer goes into administration.