Peacocks gets cooked amidst economic downturn

The latest depressing example of the calamitous effect the economic downturn is having on the high street has come with the news that clothing retailer, Peacocks, has entered administration with the possibility that 11,000 jobs may be lost.

Since the news broke that the company was in severe financial trouble to the tune of being £600 million in debt, desperate attempts have been made to broker a salvage deal, the latest being a last ditch attempt by Peacock’s Chief Executive Richard Kirk to reach a deal with what has been described as a ‘mystery investor’ and keep Peacocks afloat – at least for now.

Mr Kirk effectively has 10 days to rescue Peacocks – the time allocated between filing an intention to go into administration and administrators actually being appointed.

Previous talks with the Royal Bank of Scotland broke down due to unwillingness on the part of RBS to restructure their financial arrangements with Peacocks, another example of the pressures the economic downturn is having on all parties.

Based in Cardiff, Peacocks has over 600 stores in the UK and more than 200 overseas. Their current financial difficulties are believed to be primarily due to accrued debt and not sales as the company reported a 17% increase in sales over the festive period.

A statement released by the Peacock Group has reaffirmed its intention to sell the Bonmarche arm of the Peacocks empire: “The Board of The Peacock Group and its advisers has been reviewing the future of its Bonmarche business and its role within the Group for some time.

"Following this careful and thorough review, the Board believes Bonmarche will be better positioned under different ownership and is in advanced and exclusive discussions with a potential purchaser.

"In order to provide protection for the business whilst this sale process completes, the Board has filed a notice of Intention to Appoint an Administrator for the Bonmarche business. Existing management remain in place as an administrator has not been appointed."