Powerhouse seeks buyer as receivers called in
Electricals retailer to cut jobs and close stores
August 21 2003
Electricals retailer Powerhouse has been put into administrative receivership and is looking for a buyer.
The UK’s third biggest electricals retailer is to close 93 stores at the end of the month, making more than 800 staff redundant as receiver Deloitte & Touche seeks to sell the rest of the business as a going concern. Powerhouse has 223 stores in total, with a workforce of 8,000.
Powerhouse ran into difficulties when its insurers withdrew cover from suppliers over concerns about the company’s ability to pay its bills, preventing it buying new stock. The UK electricals market has been one of the retail sectors most affected by the downturn in consumer spending this year, and has suffered from price deflation and increased competition from supermarkets pursuing non-food sales.
Powerhouse was created through the amalgamation of the electricals showroom operations of a number regional electricity companies, and was bought by its management in 1996. In 2001, Powerhouse bought 98 stores from Scottish Power.
Deloitte & Touche said: “The company has already taken the decision to close 93 of its 223 stores, and the remainder will continue to trade as we try to find a buyer.” There will around 600 redundancies in superstores and 200 in high street outlets.
Larger rivals Dixons and the Kesa-owned Comet chain are potential buyers for some of the stores, although neither is likely to want the whole package. Catalogue retailer Argos, which has increased its electricals and furniture product range, is also being linked to the sale of the business.
Powerhouse is able to continue trading in administrative receivership while Deloitte & Touche negotiates with potential buyers.
