Published on March 23rd, 2018 | by The GC Team0
Further redundancies at Maplin Electronics
Maplin administrators PwC have announced a further 66 redundancies at the retailer’s head offices in London and Rotherham as the search for a buyer for the 217-strong store chain has so far failed.
Maplin fell into administration last month after struggling for some time as the pound lost value after the Brexit referendum, consumer confidence weakened, and the business’s credit insurance was withdrawn.
Commenting on the reason for the firm’s downfall, Zelf Hussain, joint administrator and PwC partner, said: “The challenging conditions in the UK retail sector are well documented. Like many other retailers, Maplin has been hit hard by a slowdown in consumer spending and more expensive imports as the pound has weakened.”
But in a tweet following the news of the retailer’s misfortune, Patrick O’Brien, UK Research Director at Global Data Retail, offered this view: “People looking for the causes of the demise of Maplin should also look at the 15% interest that its parent co. Rutland Partners charged on loans half of which are secured on Maplin assets. Most recent accounts show EBITDA profit of £2.4m, but interest charge of £13.7m.”
Maplin Electronics was acquired by private equity firm Rutland Partners in 2014 in an £85 million deal.
PwC said at the time that it would “engage with parties who may be interested in acquiring all or part of the company” and it would “continue to trade the business as normal whilst a buyer is sought.”
This is the second round of redundancies at the firm’s head offices – 57 in London and 9 in Rotherham, following the 63 – 55 in London and 8 in Rotherham – made on 8th March. There are currently 79 employees retained at the head office operations.
PwC said it remains open to interest from potential buyers and it will “continue to review the position of Maplin stores”.
Toby Underwood, joint administrator and PwC partner, said: “It is with real regret that we have made this decision. We are grateful for the support of the employees during this difficult period and we will make every effort to help the affected staff, working with the Maplin HR team over the coming days.”
All Maplin stores are currently still open.