UK electronics retailer Maplin entered administration this week – barely an hour after another major retail chain, Toys R Us UK experienced the same fate.
Maplin’s parent, Rutland Partners, had been in talks with potential buyers during the past month but when talks with Edinburgh Woollen Mills broke down on Tuesday, and with a massive VAT bill looming, administrators were called in.
The retailer, which in June had 217 stores in Great Britain and Ireland, has been struggling since credit insurers stopped insuring suppliers, resulting in key brands not providing stock for the Christmas period. That led to a 7 per cent fall in same-store sales over the key trading time.
Eleanor Parr, a retail analyst with GlobalData, believes Maplin is a viable business, with revenue growing 0.5 per cent to £236 million in its last trading year. Positive trading figures were turned into a £16.1 million loss due to £10 million worth of write-downs and a £13.7 million interest charge on loan notes due to Rutland Partners.
“Maplin has insisted its issues are predominantly macro, highlighting it does still have a place on the UK high street,” said Parr.
“Maplin has continued to invest in smart home, an area of strong growth within the electricals market. Its customer demographic, mainly affluent tech enthusiasts have been quick to adopt smart home living, allowing it to become an authority within the market and the retailer highlighted strong sales in this category, growing 161 per cent year on year. However, this performance has clearly not been enough to reassure investors, with Maplin unable to secure the capital it required to save it from plunging into administration.”