Dragons’ Den star Peter Jones is planning to call in administrators at Jessops, the photo retailer he rescued six years ago, as part of his efforts to salvage the company.
Mr Jones, 53, is expected to push for a company voluntary arrangement (CVA), which could lead to store closures and rent cuts, according to Sky News. The company’s rent bill increased from £4.3 million to £4.7 million last year.
Since buying Jessops’ assets for £2 million in 2013 the former Dragon had attempted to revive the business by focusing on services for people to turn their smartphone pictures into personalised gifts. In January he opened an Oxford Street store, partly to draw attention to the new business model claiming that retailers had to “change or die”.
The company has now filed a notice of intention to appoint the small restructuring advisory firm Resolve as the administrator for Jessops’ property arm, JR Prop Limited. Neil Old, Jessops’ chief executive, left the company in August to join the jewellery retailer Signet.
Mr Jones has backed a range of companies, including stakes in Red Letter Days and the Caribbean sauce maker Levi Roots. The entrepreneur is understod to believe that a CVA could keep the business going after being unsucessful in negotiations for rent reductions.
Jessops has 46 shops in the UK and employs 436 people. The company traces its roots back 130 years to a chemist store in Leicester before Frank Jessop transformed it into a photography shop in 1935, selling 16mm cine films. The company grew quickly under his son, Alan Jessop, who transformed it into a cut-price retailer of photographic equipment and it swelled to have more than 250 stores as personal cameras became more affordable for the masses.
However, the rise of the internet and high street competition threw up challenges and the company was seized by the banks in 2007 with 81 of its then 315 shops closed. Jessops faltered again in 2013 and collapsed into administration, costing 2,000 jobs, before Mr Jones stepped in to save 192 stores.
“If Jessops does proceed with a CVA it will be yet another example of a retailer blaming all of its struggles on store rents and expecting property owners to take all of the financial pain”, said Ed Cooke, chief executive of Revo, the property lobby group. “There are more than 12,000 shops in the UK where the rates are higher than rent compared to 500 in 2017. It is still too easy for retailers that have been poorly managed or have failed to modernise to seek a quick fix in rent cuts and store closures, disregarding lease agreements which have been entered into in good faith.”