As many as 1,300 jobs are at risk as the chain enters “active talks with various parties” in the hope of saving the business.
Another high street blow
Accountancy firm KPMG was appointed as the administrator to the department chain on Monday (20 Jan), after initially being in talks with the retailer last month to explore possible sale and refinancing opportunities.
The chain has 22 stores in the UK, all of which will continue to trade as usual, and all staff will be retained while KPMG assesses what options are available for the business. However, ‘closing down sale’ signs will appear in stores later this week and Beales’ website has been offline since Monday (20 Jan).
Chief executive and owner Tony Brown told the Daily Echo that he is still “confident of a positive outcome”.
He said, “We’re still in active talks with various parties and those talks continue while we go into the administration process.
“While we’ve had a very positive response from all our landlords, which have included Bournemouth, the conversations with BCP Council are exceptionally difficult as they don’t want to set a precedent. The precedent would be to end this lunacy of business rates.”
The Bournemouth-based retailer, which was founded in 1881, faced a disappointing period of trade over Christmas, and has been met with rising costs and high business rates. Its Bournemouth branch alone attracts a hefty bill of £440,000 per year.
Last October, the department store revealed it had made a £3 million loss, although it said one-off costs had disguised steady sales.
However, before Christmas this year the company appointed KPMG to review the business, officially triggering a sales process.
A spokesperson for KPMG told The Guardian, “Despite interest from a number of parties, this process did not secure any solvent solutions for the company, and as a result, the directors took the difficult decision to place the companies into administration.”
The process of entering administration comes following a difficult period for British retail in 2019, with sales falling for the first time in 24 years.
Beales reported increased losses of £3.1 million in 2019 and failed to secure rent reductions to cut its costs, or find a buyer to rescue the business.
Will Wright, partner at KPMG and joint administrator, said, “For over 100 years, Beales has been a stalwart of the high street in market towns up and down the UK, but like countless similar retailers, has found trading in recent times to be incredibly tough.
“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.”
While the stores are still operational, Beales gift vouchers, customer deposits, returns and refunds will continue to be honoured.
Stores at risk
This is the full list of Beales stores that are under threat of closure after the business entered administration:
- Chipping Norton
- St Neots