Administrator PwC chops Maplin staff
'Controlled store closure' process looms for retailer
PwC has laid off a number of staff at Maplin Electronics as the future of the retail chain continues to look bleak with potential suitors unable to agree terms and a "controlled closure" process imminent.
The gadget souk was put into the hands of PwC's administration team on 28 February following a string of financial losses and credit insurers slashing cover for suppliers that hit cash flow.
"Since their appointment, the administrators have been working closely with Maplin, its employees and suppliers. Unfortunately, it has not been possible to secure a buyer for the business," said PwC.
"While the administrators remain open to interest from potential buyers, it has been necessary to make a total of 63 redundancies at Maplin's head offices in London (55) and Rotherham (8)."
Some 2,335 people worked at Maplin when PwC was appointed, spread across 211 stores in the UK. No stores have yet been closed. All employees were paid in February.
PwC joint administrator Toby Underwood said Maplin continued to trade "but due to a lack of interest we may be required to initiate a controlled closure programme".
He said "strong value" resided in the company and PwC is still trying to "preserve the business while we continue trying to achieve a sale".
Maplin-owner Rutland Partners bought the business for £85m in 2014 and upset suppliers by bringing in some of the procurement team from Tesco – hard-nosed negotiators that attempted to get better Ts&Cs including discounts and credit.
But sales didn't grow as expected, and online rivals including Amazon continued to apply pressure to traditional bricks and mortar stores, undercutting them on price.
Maplin, once known for its well-trained staff, began to lose a reputation for technical knowledge and so its unique selling point started to become less apparent.
Credit insurance took down Comet in 2012 and it appears like it could have been the final nail in the coffin for Maplin: QBE was the first to remove trade indemnity, followed by Euler and then Atradius.
PwC was brought on board in summer 2017 to find a buyer for Maplin, our sources told us previously, but it failed and now faces the prospect of breaking up the group and selling off individual assets rather than the entire entity as a going concern. ®