TJ Hughes ‘to appoint administrators’

The Liverpool-based chain, which runs 57 stores including branches in Hull, Bradford, Doncaster and Sheffield, gave official notice that it intends to appoint an administrator over the next 10 days, according to reports.

If it fails to pull through, the group will join furniture chain Habitat and fashion retailer Jane Norman in going into administration.

TJ Hughes was bought out by its management team in March following reports that it had been hit by the withdrawal of credit insurance for its suppliers following a difficult period of trading.

The homewares sector has suffered heavy sales declines in recent weeks as nervous consumers put off purchases of big-ticket items such as fridges and TVs.

It has also been hit by January’s rise in VAT to 20% from 17.5% and the decline in the housing market, which is discouraging people from investing in improving their properties.

TJ Hughes has suffered poor trading in recent weeks and failed to raise £30 million to help it survive until the autumn, according to reports.

Accountancy firm Ernst & Young is believed to be gearing up to take control of the company in the next few days.

But there was also speculation that the company could be sold back to its current owners in a controversial “pre-pack” deal which would allow the company to scrap much of its debt and ditch some of its worst-performing stores.

The management buyout earlier this year was funded by Leeds-based turnaround specialist Endless.

TJ Hughes was previously owned by private equity group Silverfleet, which bought the company for around £70 million in 2003.

The retailer was founded in Liverpool in 1912 by Thomas Hughes. Its stores are still mainly located in the North of England.

It offers products across homewares, soft furnishings, beauty and fragrance, menswear, lingerie, toys and electrical items.

The recent decline in consumer spending also prompted HomeForm - the owner of Moben kitchens, bathroom chain Dolphin and Sharps bedrooms - to announce it would appoint administrators in coming days.

Pat Parkes, 76, from Vauxhall, Liverpool, is a regular shopper at the city’s flagship London Road store.

She said: “How awful. It’s my favourite shop, they do everything. It’s always really crowded on a Thursday and a Saturday and at Christmas it’s chocka.

“A lot of elderly people shop here. I bring my neighbour for shoes and cards at Christmas time. It’s like Woolworths, it has everything under one roof.”

Local businessman Martin Stoops, 52, who runs M Stoops Wholesale Warehouse, said: “It’s a very worrying time for business. We have traded in this area for 45 years ourselves and I have seen the change.”

Mr Stoops said councils could be doing more to help businesses by enticing shoppers with less expensive parking rates in town centres.

TJ Hughes is due to celebrate its centenary next year.