Tue, 28 Jun 2011 | ADMINISTRATION
Department store chain TJ Hughes filed its intention to appoint an administrator yesterday amidst extremely tough high street trading conditions.
Private equity group Endless bought the beleaguered retailer just three months ago, but it has come to light that fresh funds of about £30 million are needed to keep the business going until the busier trading season in the autumn.
TJ Hughes lost £10 million in the year ending 31 January, and when Endless bought it in March for a ‘nominal amount’, it injected £9 million into the business to ease the cash flow. Endless now looks reluctant to stump up an additional tranche required to keep the retailer afloat.
Based in Liverpool and established in 1912, TJ Hughes runs 57 department stores across the UK and employs about 4,000 staff. It sells branded items that encompass electricals, homewares, fashion and toys at discounted prices. Its website is currently down for maintenance.
Its homeware sales have taken a dive in recent weeks as consumers continue to avoid paying out for expensive non-essential items, including TVs. The stagnant housing market is keeping shoppers away as they spend less on investing in their homes, while January’s VAT increase to 20 per cent has also had an adverse affect on shopping activity.
Since Endless took the reins at TJ Hughes, like-for-like sales have been down by 19 per cent. The retailer has also been struggling with low stock levels, as suppliers remain cautious.
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