PwC confirms over 60 redundancies at Maplin with controlled closures in sight

19 March 2018 Authored by Consultancy.uk

Professional services giant PwC has confirmed that more than 60 jobs will be lost at the head offices of collapsed electronics retailer Maplin. The firm had hoped to avoid redundancies and store closures. However, as finding a buyer of the group has proven more difficult than expected, controlled closures have become a genuine prospect according to the administrators.

Last year, analysis revealed that the number of stores closing in the UK had fallen to 14 a day – the lowest level since before 2010, the first half of which saw record volumes closures hit 3,361. However, 2018 has seen the UK retail sector stung by several high-profile liquidations. The UK retail sector has been reported to be facing increasing uncertainty relating to Brexit, while the stagnation of wages in real terms, coupled with rising consumer debt, also looks to have had a major impact on consumers’ spending power in the sector, in a re-run of the 2007 credit crunch, leading to poor sales figures for numerous outlets.

Earlier, this volatile situation came to a head for two UK retailers in the space of one day. Shortly after long-struggling Toys R Us announced its lapse into administration, the UK high-street was further hit by the news that Maplin had also collapsed. The group was previously one of the UK's largest electronics retailers, boasting an annual turnover of £235.8 million, and operating more than 217 stores and over 2,300 staff across the UK and Ireland, with head offices in London and Rotherham.

PwC confirms over 60 redundancies at Maplin with controlled closures in sight

Despite the circumstances, however, the announcement of Maplin’s administration, and the appointment of Big Four professional services firm PwC as administrator, was padded with statements aimed at reassuring the group’s workforce of their situation. Boss Graham Harris said, "We believe passionately that Maplin has a place on the High Street and that our trust, credibility and expertise meets a customer need that is not supported elsewhere,” in a statement where he also insisted Maplin would continue to trade through the liquidation process.

Likewise, PwC moved to settle nerves of employees by stating that it would "explore all opportunities to find a new owner," before reaffirming Harris’ commitment to keeping stores open, and averting redundancies for the moment. Speaking at the time, Zelf Hussain, joint administrator and PwC Partner, said, "Staff have been paid their February wages and will continue to be paid for future work while the company is in administration."

Now, however, news has emerged that PwC has laid off a number of staff at Maplin Electronics, as the future of the retail chain continues to look bleak, and with potential suitors proving unable to agree terms. A "controlled closure" process is also thought to be imminent, with suitors remaining reluctant to commit to the purchase of Maplin. PwC joint administrator and Business Restructuring Services Partner Toby Underwood confirmed that Maplin continues to trade, "but due to a lack of interest we may be required to initiate a controlled closure programme".

Some 2,335 people worked at Maplin when PwC was appointed, spread across 211 stores in the UK, but the firm has commenced a round of redundancies to reduce this count. A total of 63 staff at Maplin's head offices face the axe, with 55 in London and 8 due to go in Rotherham.

Maplin-owner Rutland Partners bought the business for £85 million in 2014. However, sales did not grow as expected, and online rivals including Amazon continued to apply pressure to traditional bricks and mortar stores, undercutting them on price.

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