Department store Beales falls into administration

Department store Beales has appointed administrators after failing to find a buyer, putting more than 1,000 jobs at risk.

KPMG, which had been advising the Bournemouth-based chain on its options after disappointing festive trading, will act as administrator following a court hearing on Monday.

The company’s collapse comes just over two years after former BHS executive Tony Brown led a management buyout and four years after it closed some stores using a company voluntary arrangement.

Mr Brown and KPMG said last week that they were looking to sell the company and were in talks with both a retail rival and a venture capital firm. Analysts said on Monday that it was still possible the company could be bought out of administration for a nominal sum, with its inventory profitably liquidated.

Going into administration means Beales’ defined benefit pension schemes, one of which is in deficit, will pass to the Pension Protection Fund.

Beales is the first big victim of a below-par peak trading period. The British Retail Consortium has described 2019 as the worst year ever for retailers, while the official retail sales figures for December, released last week, showed an unexpected fall, meaning the sector is in its longest period of contraction since records began in 1957.

The demise of Beales, which traces its origins back to 1881 and has 23 stores in midsized towns from Yeovil to Skegness, bodes ill for other middle-market operators.

Debenhams, which was taken over by creditors last year, has not yet commented on Christmas trading. However, one person briefed on the matter said the group had hit its volume targets and generated cash but at a reduced margin because of the promotion-heavy market.

House of Fraser, which is owned by Mike Ashley’s Frasers Group, is also yet to comment on the peak trading period. Frasers does not routinely issue a post-Christmas update even though it is a quoted company.

Even John Lewis, the employee-owned group that has a stronger balance sheet, better store estate and more advanced online operation than its rivals, reported a 2 per cent decline in revenues in the seven weeks to January 4.