Beales, the department store chain, has put itself on the market after warning it faced “exceptionally challenging times”.
The loss-making retailer said it had appointed the advisory firm KPMG to help assess “strategic and financing options” including a sale of the whole company or its subsidiaries in a bid to fund its moves towards a “sustainable business model”.
In October 2018, Beales, which has 22 outlets across the UK, completed a management buyout led by the chief executive, Anthony Brown.
In a statement issued on Tuesday, Beales said it needed funds to support a new strategy, which included a rejig of its product ranges, cost-saving efforts and acquiring stores similar to an outlet in Fareham that opened in October in a former Marks & Spencer branch.
The appointment of KPMG, which is known for its expertise on insolvency and restructuring, is likely to raise fears that the retailer is facing a crash crunch.
Beale Ltd, the Bournemouth-based group’s parent company, said it was facing “exceptionally challenging times” in accounts for the year to the end of March filed at Companies House in October.
Pretax losses for the group more than doubled to £3.2m in the year to March from £1.5m a year before as sales remained steady at £48.3m. The business had net current debts of £15.8m.
It said in those accounts that trading had been hampered by an industry-wide downturn in sales of women’s fashion and the heatwave in summer 2018.
Beale Ltd said its working capital had been funded by Wells Fargo, with which the department store has a £17.3m facility in place until May 2021, and that the company also had credit arrangements in place with major suppliers.
But department stores are under pressure from rising costs, particularly business rates, and increasing competition as the brands they have specialised in are now going direct to shoppers either online or via their own stores.
Sports Direct’s House of Fraser chain has closed seven of its 59 sites since buying it out of administration last year, and it is expected to close more in 2020. Debenhams is poised to close more than 20 stores in January, and a number of local department store groups including Scotland’s Watt Brothers have fallen into administration.
