BUDGET clothing retailer Peacocks is looking to restructure £240m of debt amid reports the firm is planning a huge round of store closures, adding to the UK retail sector’s pre-Christmas gloom.
A spokesman for the group said: “We continue to progress our restructuring discussions and plans, with no decisions taken at this point.” He declined to comment on reports claiming that Peacocks is looking to axe up to 200 UK stores.
The company trades from 611 Peacocks stores and 394 Bonmarche shops in the UK, as well as 117 overseas outlets.
Bradford-based Morrisons is currently running a trial with Peacocks and three Morrisons stores now have Peacocks concess- ions.
Peacocks, which started life as a bazaar in 1884, has 70 stores in Yorkshire.
The company floated in 1999 and was taken private by a consortium of investors in 2006.
It now faces a huge rent bill on December 25.
The group made earnings before interest, tax, depreciation and amortisation of £66.5m in the year to March 2011.
Its shareholders include US investment bank Goldman Sachs, while management, led by chief executive Richard Kirk, have a significant minority holding.
Sources said Peacocks’ lenders, the main one of which is Royal Bank of Scotland, remain supportive of the management team which is examining its property portfolio.
“The business is performing respectably in a poor market. What they’ve got to do is get their capital structure right so that it can go forward,” said one, adding no announcement on the restructuring was expected until the new year.
With consumers’ disposable incomes being squeezed by rising prices, muted wages growth and Government austerity measures, retailers are nervous about spending in the key Christmas trading period and discounting is rife.
Industry data for November was weak and firms, such as fashion chain French Connection and video games retailer Game, have already issued pre-Christmas profit warnings.
Fears that some more big names could disappear from the high street were compounded on Wednesday when outdoor retailer Blacks Leisure announced plans to put itself up for sale after it failed to raise enough funds to carry on the business.
On Thursday, the owner of shoe shops Barratts and Priceless Shoes went into administration, threatening the loss of nearly 4,000 jobs.
The failure of the Bradford-based chain Barratts Priceless was blamed on the tough economic climate.
Administrator Deloitte will continue to trade the stores while it seeks a buyer for all or parts of the business.