Beales could be sold as it calls in KPMG, switches focus to shoes, accessories
Venerable department stores chain Beales has called in KPMG to look at options for refinancing and restructuring, the business said on Tuesday, with a sale being considered.
The firm said it’s “currently assessing a number of strategic and financing options that are available to the company”. And it added that it’s “assessing a potential sale of the company and its subsidiaries, including J E Beale plc. The company has resolved to take advantage of the dispensations available from certain provisions of the Takeover Code to facilitate discussions with interested parties by commencing a formal sale process”.
It’s thought that even if the 138-year-old privately-owned business isn’t sold, the review process could see it closing several of its 22 stores and renegotiating rent deals on its sites. It had already negotiated better deals back in 2016 when a CVA led to major rent cuts at 11 of the chain’s stores, which numbered 29 at the time.
The company, controlled by a vehicle run by retail veteran Tony Brown, has around 1,300 employees with another 300 working in concessions in its stores.
On Tuesday it also said that it “continues to acclimatise to the ever-changing landscape and challenges of the retail market. Investment is sought to deliver a sustainable business model for the future”. This will include further central cost-saving strategies and “building on the success of the new Fareham store by exploiting further opportunities to acquire retail sites of a similar format”.
Importantly, it will also include completing its shift from a broad-based department store chain “to focus on housewares, small domestic appliances, fashion accessories and shoes, which are all showing significant sales improvements following a change in strategy launched earlier in 2019”.
Beales may not be on the ropes in the same way as some of its larger rivals have been in recent years, but it’s facing the same brutal conditions as its retail peers so the move doesn’t come as a surprise.
Its current ownership structure has been in place for just over a year after Tony Brown led a management buyout in 2018. It had been publicly listed until 2015 and has been in private hands since then.
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