TJ’s creditors stand to lose £350m
UNSECURED creditors owed around £350m by the failed retail chain TJ Hughes will not get anything back, say administrators.
A creditors’ report by Ernst & Young shows the business collapsed last month with liabilities of £432m.
Around £310m is owed to landlords who have 25-year lease agreements with TJ Hughes, but administrators expects them to mitigate their exposure by reletting properties. A further £40m is owed to trade creditors with clothing and merchandise suppliers expected to lose around £25m.
Only secured creditors will see a return, with asset-based lender Burdale expected to recover its £13m. GA Europe, which acquired a £10m debt from Endless – the turnaround fund that backed a management buyout at TJ Hughes in April – will not be paid in full. HM Revenue & Customs is owed £5m and inter-company loans amount to £48.9m.
The report also shows how the main trading company, TJ Hughes Ltd, made an operating loss of £7.1m in the year to January 29 on sales of £276.2m. In each of the previous three years the group made an operating profit, rising to £6.8m in 2010.
On Wednesday Ernst & Young announced a further 12 store closures. Of TJ’s estate of 57 shops six have now been sold and 41 either closed or earmarked for closure.
Around 3,000 of the group’s 3,500 staff could ultimately lose their jobs.
