Department store in race to achieve sale and avoid risk of 1,000 job losses

The Southport Beales store

Department store chain Beales is on the brink of collapse, putting up to 1,000 jobs at risk.

Over the weekend the store, which began trading in Bournemouth in 1881, filed notice of its intention to appoint administrators.

Beales operates 22 stores, including sites in Southport and Kendal.

In October 2018 the group chief executive, Anthony Brown, completed a management buyout of the business.

But last month, on December 17, it announced that it was putting the business up for sale, saying it was assessing a number of strategic and financing options available to the company: “These options include, but are not limited to, assessing a potential sale of the company and its subsidiaries, including J E Beale plc.”

It is believed two suitors – another retail firm and a venture-capital investor – remain interested in purchasing the business.

But Beales urgently needs funds to achieve a “sustainable business model”, which would include a new strategy, an overhaul of its product ranges, and cost cutting.

The firm is negotiating with its landlords to try and agree rent reductions.

Its latest accounts showed that pre-tax losses more than doubled to £3.2m in the year to March 2019 from £1.5m a year before, while revenues remained static at £48.3m. The business had net current debts of £15.8m.

In those latest accounts Beales said that trading had been hampered by an industry-wide downturn in sales of women’s fashion and the 2018 Summer heatwave.

The wider retail sector continues to suffer the effects of increasing online trading and consumers unwilling to loosen the purse strings.

Debenhams has announced plans to close 19 of its stores, with the loss of 660 jobs, in a bid to cut costs, including sites in Altrincham and Southport.

Mothercare’s 79 UK stores have ceased trading, while John Lewis has warned that its staff bonus may be in doubt due to a fall in Christmas sales.

Last week, fashion chain Superdry said its profits could be wiped out after sales fell sharply over Christmas.

Close