Richard Fleming, Chris Laverty, Ed Boyle and Joff Pope of KPMG, the joint administrators of Peacock’s Stores Limited, The Peacock Group Plc, Peacocks (Nantgarw) Limited, Dorsman Estates Co Limited and Henson No.4 Limited, which together make up the high street budget fashion retailer Peacocks, have published the first creditors’ report, as per statutory requirements.
Chris Laverty, restructuring partner at KPMG and joint administrator, commented:
“Peacocks was the largest retail failure of 2011 and required the mobilisation of a significant team of over 50 KPMG staff, made up of a diverse range of professionals from employee specialists to tax experts. The team worked with hundreds of stakeholders to stabilise the business while we sought a buyer on a going concern basis; not least working with 9,600 staff, negotiating with over 150 suppliers, managing 611 stores and 49 concession sites plus interacting with 15 international franchise partners.
“Apart from head office redundancies, all staff were kept in their posts until the sale of the majority of the business four weeks after our appointment to Edinburgh Woollen Mill. Employees will be paid in full but, due to the severity of the indebtedness of the company, senior secured lenders are unlikely to make a full recovery and there will be a very small return to unsecured creditors. We continue to recover value were possible and, to this end, the assignment of leases of closed stores continues apace, as does the collection of international debtors.”
Mark Bayley, restructuring real estate director at KPMG, added: “Of the 224 stores that did not transfer as part of the sale of business, we have negotiated deals on 30 properties between 4,000 and 20,000 sq ft in size so far. We have exchanged contracts with three retailers - Poundland, Poundworld and Iceland - to date with many more expressing serious interest. We are actively marketing the remaining 124 stores, which continue to attract a high level of interest from a variety of goods and food operators.”
KPMG is also in discussions with Edinburgh Woollen Mill regarding 17 former Peacocks stores. The administrators have surrendered the leases on a further 53 closed stores to landlords.
- Total group debt was over £700m, including c£133m from a syndicate of senior lenders plus over £500 million of mezzanine and junior facilities from other lenders.
The administrators’ key tasks on appointment included:
- Management of the property estate, including negotiations with landlords and ensuring that appropriate facilities were provided to keep the stores trading;
Dealing with retention of title claims received from suppliers;
- Managing warehouses, logistics and distribution centres, including negotiation of lien claims made by hauliers and other third parties;
- Liaising with concession partners (mainly Morrisons and the Co-op) - revised trading terms were agreed with all parties;
- Liaising with international franchisees: revised trading terms were agreed with half of the franchisees resulting in increased sales during the administration period;
- Dealing with suppliers: trading terms were agreed with over 150 business critical non-stock suppliers in order to stabilise the business and allow on-going trading;
- Reaching agreement with the company’s shipping agent to release stock that had been landed in Southampton so that it could enter the UK supply chain;
- Reaching agreement with HMRC as to the basis on which import VAT and import duty would be paid on stock entering the UK;
- Ensuring the companies complied with appropriate health and safety rules and regulations during the period of trading.
- The administrators' time costs to date total £5.4m and they will seek the approval of the creditors for their fees.
Sale of business and returns to creditors:
- On 20 January 2012 Bonmarché was sold via ‘pre-pack’ administration to Sun European Partners;
- On 22 February 2012 the majority of the Peacocks business was sold to Edinburgh Woollen Mill;
- Employees rank as preferential creditors and will be paid in full;
- It is currently estimated that the senior secured lenders (owed c.£133m) will not make a full recovery on their debt;
- Due to the level of the senior secured lenders’ indebtedness there will only be a very small payment to unsecured creditors of the main trading company: an unsecured claim of £100 is estimated to receive a distribution from the Prescribed Part* of only 68 pence.
Notes to editor
The full creditors’ report is available online at: http://www.kpmg.com/UK/en/IssuesAndInsights/ArticlesPublications/Documents/PDF/Advisory/pstores-proposals.pdf
Prime Retail is advising KPMG on the disposals of closed stores. Interested parties should contact Tim Hance at Prime Retail on 020 7016 5340 /email@example.com.
Richard Fleming, Chris Laverty, Ed Boyle and Joff Pope of KPMG were appointed joint administrators to Peacock’s Stores Limited, The Peacock Group Plc, Peacocks (Nantgarw) Limited, Dorsman Estates Co Limited and Henson No.4 Limited, which together make up the high street budget fashion retailer trading as Peacocks on 19th January 2012. Around 250 Head Office staff were made redundant on 19th January.
*Under the Insolvency Act, the Prescribed Part is a ring fenced amount of the realizations (net of costs) made from floating charge assets, of up to a maximum amount of £600,000 in each company, which is available to unsecured creditors.
KPMG has set up a helpline number and email address for Peacocks customers or creditors: 0118 373 1423 / firstname.lastname@example.org.
For further information on the administration, please contact:
Sorrelle Cooper, Senior PR manager, KPMG
020 7694 8527 / 07932 078218
Zoe Sheppard, PR manager, KPMG
0117 905 4337 / 07770 737994
KPMG Press Office: 020 7694 8773
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