Department store chain Beales is currently in talks for a last-ditch sale in an effort to save itself from filing for administration. The 139-year-old brand, which employs 1,000 people and operates 22 stores, has been struggling due to the challenging state of the UK retail sector. In an attempt to explore refinancing and restructuring options, Beales sought the assistance of KPMG in December. However, it seems that a sale is now the only viable solution after the company filed a notice of its intention to appoint administrators. Two potential buyers, one of which is a competitive retail company and the other is backed by private equity, are currently in discussions with Beales.
This news comes during a difficult time for physical retailers in Britain. John Lewis, another major player in the industry, recently announced the departure of its Managing Director and warned that its staff bonus might be at risk due to weak sales. Debenhams, a larger peer of Beales, has also started closing down several stores, and Mothercare has recently shut down its entire UK store chain. Beales has been particularly impacted by the challenging trading conditions during the festive season.
In addition to the potential sale, Beales is also engaged in negotiations with its landlords to secure new rent deals and lighten the financial burden. The company reported a loss of £3.1 million in its most recent financial year, compared to a loss of £1.3 million the previous year. CEO Tony Brown, who led a management buyout in 2018, acknowledges that this has been the most difficult period for retail and that the Christmas season did not meet expectations.
The future of Beales remains uncertain, as it is unclear what price the business could fetch given its current crisis state and the overall challenging conditions faced by department stores in the UK. Nevertheless, the company remains hopeful that a successful sale can be finalized in the next few days to ensure its future survival and the job security of its employees.