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Peacocks: Cardiff HQ staff told firm will enter administration Clothing retailer Peacocks enters administration
(40 minutes later)
Staff at troubled clothing retailer Peacocks' HQ have been told that the company is to go into administration. Clothing retailer Peacocks has gone into administration, it has been confirmed.
Previously the company, which has tried unsuccessfully to restructure its £240m debts, had said it planned to take the action but the news comes as confirmation. Staff at the company's Cardiff HQ were told of the move by chief executive Richard Kirk on Wednesday afternoon.
The company employs more than 400 in Cardiff and 10,000 more across the UK. The firm, which has tried unsuccessfully to restructure its £240m debts, employs more than 400 in Cardiff and over 9,000 others across the UK.
Welsh Labour MPs have called on UK Business Secretary Vince Cable to take action to help save the company. Mr Kirk was given a round of applause by staff after a speech saying he had done all he could to save the company.
Earlier, they had warned in a letter that the Cardiff-based firm may be forced into administration because banks are "refusing to provide further working capital". In a statement he thanked the firm's staff and said: "Peacocks is a brand with great heritage, and it is with deep sadness that we have been left with no other option but to today place the business into administration.
The UK government said it was taking action to help shops. "We have worked tirelessly over the past year to agree a new financial structure to take the business forward in the current, tough retail environment, including seeking new investment for the business.
It was announced on Tuesday that Peacocks has 10 days' protection from its creditors to find a new investor or it will go into administration. "This is a hugely sad development for all of our stakeholders, especially our employees who have shown total commitment to the business over an uncertain and difficult period."
Talks with lenders, including Royal Bank of Scotland and Barclays have, so far, failed to find a solution. The Peacocks business operates around 611 stores and 49 concessions across Wales, Northern Ireland, Scotland, and England and employs approximately 9,600.
The letter to Mr Cable was signed by all 26 Welsh Labour MPs, representing areas where Peacocks is a significant employer. Staff at the HQ are expected to lose their jobs on Thursday. It is understood the stores will stay open and the slimmed-down company will be sold on.
Investment syndicate KPMG confirmed that the joint administrators - Richard Fleming, Chris Laverty, Ed Boyle and Joff Pope - would run the company while actively seeking a buyer for it as a going concern.
The letter posed several questions to Mr Cable such as asking what dialogue the UK government has had with Peacocks and its investment syndicate. All stores would continue to operate as usual, said KPMG in a statement. No stores had been closed and there had been no immediate redundancies.
The MPs said their primary concern was to prevent the company from going into administration and to protect the thousands of jobs which the company supports across the UK. The Bonmarché business, which employs approximately 3,800 staff and is also owned by The Peacock Group plc, has not entered administration, said the statement.
A Department for Business, Innovation and Skills spokesperson said the government was taking action to help shops by extending small business rate relief, maintaining a town centre-first planning policy, scrapping rules which pushed up parking charges, and cutting National Insurance for employers. 'Viable business'
Peacocks has more than 600 stores and concessions in the UK, and 117 other stores around the world. Its expansion into Russia and eastern Europe was particularly successful. However, the business filed a notice of intention to appoint administrators on Monday. The notice allows 10 working days before the appointment of administrators. A buyer is being sought for the business.
While continuing to make operating profits, the group's overall financial performance has been weighed down by the level of its debts, which stem from a management buy out in 2006. Mr Laverty, joint administrator and restructuring partner at KPMG, said: "Like many retailers Peacocks has suffered from tough economic conditions, which have seen its customers reduce their spending on the high street.
Welsh Business Minister Edwina Hart has said she is in contact with the UK government over Peacocks' difficulties. "This factor, combined with a surplus of stores and high overheads, led to the business becoming financially unviable in its current form."
She was speaking in response to an urgent question from the Conservative assembly group leader Andrew RT Davies when the firm was discussed in the Welsh assembly on Tuesday afternoon. Mr Fleming added: "We are actively seeking a buyer for the 611 stores and 49 concessions and encourage interested parties to get in touch."
A spokesman for Barclays said: "This is not the end for Peacocks, there is a viable business here and our support continues".
UK Employment Minister Chris Grayling told BBC Radio Wales that he hoped Peacocks could be sold as a "going concern".
He said it was "disappointing news" and he felt "desperately" for those involved.
Earlier Welsh Secretary Cheryl Gillan had said the UK government would look at what it could do to help the firm.
But she warned she would not make early or false promises about the future of the Cardiff-based business.
On Tuesday Welsh Labour MPs called on UK Business Secretary Vince Cable to take action to help save the company.
They warned in a letter that the Cardiff-based firm may be forced into administration because banks are "refusing to provide further working capital".