Beales, the department store chain that has traded since 1881, has told the public it may have to call in administrators. At stake are 22 stores and 1,000 jobs, and the only way out is a buyer.
The company, based in Bournemouth, is also negotiating with its landlords for lower rents. The BBC understands it is talking to two possible buyers, a rival retailer and a venture capital investor. Beales said that poorer-than-expected trading over Christmas had put its survival at risk. Even if the immediate future is secured, store closures have not been ruled out.
“A stronger if leaner Beales”
Chief executive Tony Brown led a management buyout in 2018, taking the company private 23 years after it floated on the London Stock Exchange. Last month he brought in advisers from KPMG to run a strategic review.
Brown told the Daily Echo that the retailer had struggled in difficult trading conditions, and he called high business rates “lunacy”. He sounded hopeful about the outcome. “We are confident that we have a solution for the business that will create a stronger if leaner Beales,” he said.
He would not say which shops would survive. “I can’t predict which stores will stay and which stores won’t because it all depends on landlords and local government,” he said.
A hard month for retail
The losses were already visible. In the year to March 2019, Beale Ltd lost £3.1m, against £1.3m a year before, as costs rose and sales slipped.
The warning landed in a rough week for the high street. Debenhams began closing 19 shops on Saturday, and Mothercare’s 79 UK stores were due to stop trading on Sunday. The British Retail Consortium said last year was the worst on record for the high street. UK retail sales fell for the first time in a quarter of a century, and sales in November and December were down 0.9%.
John Lewis said its staff bonus might be in doubt after sales at its department stores fell 2% on a like-for-like basis. Superdry warned that its profits could be wiped out, blaming “unprecedented levels of promotional activity” by rivals. A string of failures in 2019, among them Jessops, Clintons, Bonmarche and Karen Millen, pushed rents down and hurt landlords.
Not everyone struggled. Next raised its profit forecast, with full-price sales up 5.2% over Christmas, and JD Sports expects full-year profits at the top end of forecasts.
