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11 January 2013 | Anna Reynolds
Photography retailer Jessops went into administration because it could not strike a deal with its suppliers for further support, the company handling its collapse said.
PwC were appointed as administrators of the camera retail chain this week, following a poor trading performance over 2012, which deteriorated further in the period before Christmas.
According to the administrator the company’s two main suppliers, Nikon and Canon had wanted payment for their products as soon as they were sold. Talks between the company’s directors, its primary lender HSBC and key suppliers were held in an attempt to strike a deal to ease the financial pressure, but did not prove successful.
A spokesperson for PwC told SM: “The suppliers were the tipping point, the credit limit they were imposing on Jessops meant that the window to pay them was getting smaller and smaller. Unfortunately Nikon and Canon couldn’t see themselves giving Jessops any more favourable terms.”
In a statement to SM Nikon said: “Nikon sincerely regrets that Jessops have filed for administration. Jessops has been a valued customer of Nikon for many years and Nikon has continuously supported Jessops. More recently, the management teams of Nikon and Jessops reached an agreement on how Nikon would continue to support Jessops and enable them to continue trading. Recent trading performance of Jessops however, has not been in line with their expectations and Nikon unfortunately has not been able to extend further support.”
A statement from Canon also expressed regret at the retailer’s demise. “Canon is disappointed to hear the news regarding Jessops, having had a strong business relationship with the company for many years and particularly following our efforts to support them during recent trading conditions,” the company said.
Jessops has 192 shops with around 2,000 employees across the UK. PwC said it would be inevitable there would be store closures, but is holding discussions to find a buyer for the firm.
According to Matthew Rubin, associate analyst at Verdict Research, the administration is a surprise. “We are very surprised at this news, we were looking at Jessops’ financial results recently and didn’t see this coming,” he told SM.
According to Verdict although Jessops made an operating loss of £500 million at the beginning of January 2012, they believed the company was managing this fairly well over the course of the year. PwC said that turnover in the year to 31 December 2012 had been £236 million.
Rubin added: “We had expected that the manufacturers would support Jessops as it is one of the few camera specialists left in the market.”