Bargain bookseller The Works has gone into administration, as reported in this week’s issue of Retail Week.
Restructuring firm Kroll is handling the administration of the 317-store chain. The retailer’s main bank, HSBC, was thought to be mulling a rescue package, but decided to put the chain into administration yesterday afternoon, putting 1,600 jobs in jeopardy.
The Works is the latest victim of dire trading on the high street, which has been compounded by soaring business costs and a collapse in consumer confidence. In the past two months, homewares retailer Ponden Mill and footwear chain Dolcis have gone into administration.
The Works is thought to have suffered weak trading in the second half of last year. One industry source suspected that the retailer had faltered under pressure from the big supermarkets’ incursion into books, as well as a resurgent WHSmith and Waterstone’s.
In 2005, Hermes Private Equity backed a£50 million management buy-out of The Works, with debt provided by HSBC. The retailer is understood to have appointed business advisory firm Kroll last week to carry out an independent review of its commercial health and prospects.
In December, The Works chairman Tim Brookes told Retail Week that the retailer would put its store opening programme on hold this year, following mixed sales in the run-up to Christmas.
Brookes said then: “Consumers are really worried this year – footfall is down.” He admitted: “I am horribly pessimistic for next year.”
No comments yet