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Insiders fear for Beales’ future

Administrators are unlikely to find a buyer to rescue Beales department store following its collapse into administration this week, industry sources have indicated. 

The retailer, which employs around 1,052 staff, appointed KPMG as administrator on Monday after failing to secure a bid or investment for the business. All 23 stores will continue to trade for the time being, but the website has been taken offline.

The managing director of one brand stocked in Beales had little hope that a sale of the business will be secured: “They will struggle to get anyone to buy the business.

“It is way behind in its whole outlook. Its stores are dated and the staff lack training, as well as the fact there are far too few of them to man the shops.”

He added: “[The management] seem clueless at the whole marketing side of the business. Social media seems to pass them by with just a cursory glance. They simply have not embraced any of the new means to drive the business or the brand.”

A former supplier said the collapse of the retailer, which began trading in Bournemouth in 1881, reflected how difficult the retail market is.

“[The department store model] is really struggling. Anybody [who would buy Beales] is on something like a suicide mission.”

A retail restructuring expert said he expected most suppliers will have limited their exposure to Beales given the current market conditions: “I’m sure there are some third-party brands that might be impacted, but with all that’s been going on recently, you’d have thought you’d be quite protective about your position. That has probably worked against Beales in terms of the amount of credit they’ve been able to have.

“I’d have thought if [it was going to be rescued], it would have happened through a pre-pack administration by now. My suspicion is [the properties] won’t be reused as department stores. I’m not hopeful it will be saved.”

Another industry insider agreed: “It’s highly unlikely it’s going to go as a group because you look at the big players and they’re shedding department stores. You really have to look at the positioning of those stores and how valuable those freehold sites are.”

KPMG partner Will Wright, who is joint administrator to Beales, said: “With the impact of high rents and rates exacerbated by disappointing trading over the Christmas period, and extensive discussions around additional investment proving unsuccessful, there were no other available options but to place the company into administration.

“Over the coming weeks, we will endeavour to continue to operate all stores as a going concern while we assess options for the business, including dealing with prospective interested parties.”

Beales’ operating losses grew to £2m in the year to 31 March 2019, from £865,000 the year before. Turnover was £48.3m in 2019, marginally down from £48.7m in 2018.

Locations of Beales stores
  • Beccles
  • Bedford
  • Bournemouth
  • Chipping Norton
  • Diss
  • Fareham
  • Great Yarmouth
  • Hexham
  • Keighley
  • Kendal
  • Lowestoft
  • Mansfield
  • Perth
  • Peterborough
  • Poole
  • Skegness
  • Southport
  • Spalding
  • St Neots
  • Tonbridge
  • Wisbech
  • Worthing
  • Yeovil

 

Readers' comments (1)

  • Andrew Perloff / Panther securities own 14 of the freeholds (mainly the smaller market towns sites) The rent on these are around £800k per annum (panther securities accounts) , I would of thought he would be quite keen on keeping these occupied in some form as otherwise he would be paying the rates anyway? how about a 100% concession model ?

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