UK arm of Toys R Us collapsed earlier on Wednesday
Electronics chain Maplin collapsed into insolvency on Wednesday, making it the second retailer to succumb to a brutal winter for Britain’s consumer economy in the space of just over an hour.
Graham Harris, who became chief executive only last month, said: “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 into an administration process. During this process Maplin will continue to trade and remains open for business.”
The British arm of Toys R Us had already called in administrators after last-ditch efforts to find a buyer drew a blank.
Maplin was founded as a small mail order business in 1972 by husband and wife team Roger and Sandra Allen and their friend Doug Simmons out of a bedroom in the Allens’ house in Essex. The business was sold by its management team and backer Graphite Capital until 2004, when private equity group Montagu bought it for £244m.
Montagu then sold Maplin for £85m to Rutland Partners, a special situations investment fund that also owns a stake in Pizza Hut UK, in 2014. Maplin employs 2,335 people and has an annual turnover of £235.8m, operating out of 217 stores across the UK. Its administrators PwC said the group had gone into insolvency proceedings after it “experienced a decline in performance as a result of the softening of consumer demand in what has been a challenging retail environment”.
A lower pound-to-dollar exchange rate had also adversely affected Maplin, PwC said, as it sources supplies in the US currency and sells its goods in sterling. “Like many other retailers, Maplin has been hit hard by a slowdown in consumer spending and more expensive imports as the pound has weakened,” PwC partner Zeff Hussain said.
He added PwC would now be contacting potential buyers of part or all of Maplin’s assets. “We will continue to trade the business as normal whilst a buyer is sought,” Mr Hussein said. “Staff have been paid their February wages and will continue to be paid for future work while the company is in administration.” PwC did not provide a comment on the future of Maplin’s pension scheme, however.