Updated Maplin has slipped into administration after PriceWaterhouseCoopers (PWC) failed to find a buyer for the hard-pressed gadget emporium.
“I can confirm this morning that it has not been possible to secure a solvent sale of the business and as a result we now have no alternative but to enter administration,” said Maplin CEO Graham Harris.
He added that “during this process Maplin will continue to trade and remains open for business”.
Rutland Partners, the private equity owner of Maplin, hired PWC to get shot of the ailing retailer last summer, but the need to sell the business became more pressing in January as finances dried up. One interested suitor was believed to be Edinburgh Woollen Mill.
Harris added: “The business has worked hard over recent months to mitigate a combination of impacts from sterling devaluation post Brexit, a weak consumer environment and the withdrawal of credit insurance. These macro factors have been the principal challenge not the Maplin brand or its market differentiation.”
El Reg exclusively revealed last autumn that QBE was the first credit insurer to remove trade indemnity on Maplin due to concerns over its bricks-and-mortar overheads coupled with high debt, and the fact it was losing sales to online giants including Amazon.
Harris said he still had faith that Maplin has a “place on the high street” and that its “trust, credibility and expertise meets a customer need that is not supported elsewhere”.
Many Reg readers, judging by their comments, will not agree. To some of them, Maplin died years ago when it stopped stocking components, its prices became less competitive and staff less informative.
“We will now work tirelessly alongside Zelf Hussain, Toby Underwood and Ian Green, from PWC, who have been appointed as the joint administrators of Maplin Electronics Ltd to achieve the best possible outcome for all of our colleagues and stakeholders,” said Harris.
Cynics might think that Rutland Partner, as a secured creditor, might not do too badly out of the process. El Reg couldn’t possibly comment.
A spokesman at Maplin told us the company had made some redundancies in January to the centralised team at HQ, but as yet no other moves had been made across the 211 stories in the UK. Some 2,335 are employed by Maplin.
He said PWC was locked in talks over a solvent sale to one buyer but had around seven others considering taking on a restructured company.
Maplin previously admitted its troubles could result in a pre-pack administration, but if that fails to materialise, the business will be wound down.
In the year to 18 March 2017, Maplin turned over £235.8m in sales versus £234.5m in the prior year. It reported an operating loss of £2.65m compared to an operating profit of £1.82m. After interest and tax payouts, Maplin reported a loss of £15.75m for the year, worse than the £11.68m loss in fiscal 2016.
Rutland Partners paid £85m for Maplin in 2014, which is much lower than the £244m that previous owner Montagu paid for the business. According to the latest P&L accounts Maplin owes £99m in long-term loan notes and borrowings.
Online sales in Europe will grow 10 times faster than the retail market over the next five years, according to researchers at Forrester.
Updated to add
PWC contacted us to add there are "no immediate plans" to close stores, outstanding customer orders will be "delivered as usual", and it is "currently assessing the status of gift cards, in the meantime they will continue to be honoured in stores and online." ®