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Maplin in last-ditch bid to secure 'solvent sale'

The owner of Maplin, one of Britain’s biggest electrical goods retailers, is racing to avoid calling in administrators amid deepening pessimism about the outlook for the high street.

Sky News has learnt that Rutland Partners, which took control of Maplin in 2014, is this week in crunch talks with potential buyers – including Edinburgh Woollen Mill (EWM), the clothing empire run by one of the industry’s most acquisitive tycoons.

Rutland wants to secure new investors for Maplin by the end of this week, with a pre-pack administration being considered as a viable option if a solvent sale cannot be concluded.

The urgent talks aimed at finding new backers for Maplin follow the withdrawal of credit insurance to some of the chain’s suppliers last autumn.

Maplin, which employs approximately 2,500 people, trades from just over 200 stores across the country.

Sales during the crucial Christmas period plunged by 7% on a like-for-like basis, partly as a result of stock shortages triggered by the loss of suppliers’ insurance.

It is the latest prominent high street name to feel the chill from jittery consumer confidence and an inflating cost-base, with chains such as House of Fraser, New Look and Toys R Us being forced to cut jobs, close shops and enter emergency talks with creditors.

In a statement issued to Sky News on Monday evening, a Maplin spokesman said: “We are in advanced talks with a number of parties and expect to be in a position to announce a solvent sale of the business within days.

“Once secured this will stabilise the business to the benefit of all stakeholders and provide Maplin with the financial firepower to deliver its 2020 multichannel strategy focused on smart tech.”

Sources close to the process acknowledged that a pre-pack administration – a process in which the owner of a business lines up a buyer for its most attractive assets before appointing insolvency practitioners – was a possible alternative outcome.

Such a scenario would make Maplin one of the largest retailers to call in administrators for some time, with Toys R Us UK – which employs 3,200 people – racing to avoid collapse over the coming days.

Toys R Us has 106 UK stores and employs 3,200 people in the country
Image:Toys R Us UK is another UK retailer facing financial hardship

In a statement released in December, Maplin said the “structural challenges facing retailers with a high street presence, including Maplin, are well documented and have existed now for some time”.

If it does pursue a sale via a pre-pack administration, the prospects for an undisclosed number of its stores and employees would remain optimistic.

The emergence of EWM as a possible buyer of Maplin will surprise the retail sector, given its focus on high street clothing brands.

Under Philip Day, EWM’s owner and chief executive, the group has become one of the biggest employers on British high street, sweeping up brands including Austin Reed, Jaeger, Jane Norman and Peacocks.

It now operates more than 1,100 stores and concessions in the UK, and employs 24,000 people around the world.

Other businesses in its portfolio include Country Casuals, the specialist golfing apparel brand ProQuip and Ponden Home, a homewares retailer.

Sources said that PricewaterhouseCoopers, which is advising Rutland on the sale of Maplin, had approached Mr Day some weeks ago, and that the two parties were now in active talks.

They cautioned, however, that it was too soon to know whether EWM would lodge a formal bid for Maplin this week.

Mr Day has a long-standing connection to Rutland, having bought EWM from the private equity firm in 2002 for £68m.

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EWM is now valued at many times that sum, having spent substantial sums on acquisitions and improving the operational performance of those businesses.

Rutland and EWM declined to comment on Monday.

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