UPDATED: Jessops collapses into administration, store closures expected

PwC said that in the last few days Jessops directors, funders and key suppliers had been “in discussions as regards additional consensual financial support for the business”.

“However these discussions have not been successful,” said Rob Hunt PwC joint administrator and partner. “In light of these irreconcilable differences the directors decided to appoint administrators and we were appointed earlier today.”

The retailer has had a rocky few years. It managed to avoid administration in 2009 by securing a debt for equity swap with its lenders HSBC. But it has been under pressure following the increased popularity of camera phones, hitting demand for digital cameras.

Hunt said: “Our most pressing task is to review the company’s financial position and hold discussions with its principal stakeholders to see if the business can be preserved. Trading in the stores is hoped to continue today but is critically dependent on these ongoing discussions.

“However, in the current economic climate it is inevitable that there will be store closures.”

On Monday Jessops, which operates 192 stores and employs 2,000 people, revealed it is closing 15 unprofitable stores.

Jessops said its performance “deteriorated” in the run up to Christmas due to low consumer confidence. It revealed it did not hit expected profit levels due to additional funding needed by the company. A credit squeeze by the supplier base exacerbated the situation, said the retailer.

Jessops said it will be unable to honour customer vouchers or accept goods for return.

In the year to December 31, 2012 Jessops generated turnover flat at £236m but the retailer did not give any detail about profit. In the year to January 1, 2012 Jessops’s EBITDA surged 29.8% to £5.7m but it remained loss-making, posting a £5.2m loss.

In 2012 it suffered the loss of both its chief executive Trevor Moore, who joined HMV as it chief executive last year, and its chairman David Adams. The company did not appoint a replacement chief executive but hired Martyn Everett as chairman and promoted Neil Old to lead the business as chief operating officer.

Jessops has been attempting to boost business by refreshing stores and developing ‘Live’ stores which allow customers to try out the products.

It opened or converted up to 25 ‘Live’ stores last year. In the second half of last year it launched academies which offer customers training on all aspects of photography. It also opened up to four new format stores last year which feature a layout dedicated to shop-in-shops for each of its key brands.

It had also been developing on its online business offering personalised gifts and accessories alongside its camera offer. Jessops had also been working closely with suppliers to offer customers better products.

Jessops could not be reached for comment.