KPMG appointed to oversee Watt Brothers administration
A family-run retailer has collapsed after more than 100 years in business, seeing almost 300 jobs lost across Scotland. Professionals from KPMG will now oversee the administration of Watt Brothers, which is the latest in a succession of well-known brands to succumb to a downturn on the UK high street.
Founded in 1915, Watt Brothers is a retailer operating across Central Scotland. The company, which is headquartered in Glasgow, operates a chain of 11 department stores across the country. However, despite its long-term success on Scottish high streets, the prevailing high street crunch which has seen so many other brands fall into insolvency in recent years has led to Watt Brothers’ collapse into administration.
Blair Nimmo and Alistair McAlinden of KPMG have been installed to oversee the process, and noted that pressures beyond the company’s control had ultimately cost it dear. A statement from the pair said that despite the retailer's “tireless efforts to increase margins, cut costs and recapitalise the business,” Watt Brothers had continued to “incur trading losses as a result of the well-publicised challenges being experienced across the retail sector.”
The chain's turnover had ramped up year-on-year, peaking at approximately £24 million in 2018. Despite this, however, increased revenue did not translate into profit – leading to a strain on margins, coupled with rising competition from ecommerce and new discount retailers. As a result, the company suffered a loss in 2018. With trading losses continuing into 2019, the family-run business had attempted to secure new investment, but to no avail.
As a result, following their appointment the administrators said they were left with "no other option" but to axe 299 of the company's 306 employees with immediate effect. The remaining employees will remain with the firm to assist the sell-off of the company's assets, including stock and property. According to reports in the Scottish press, Nimmo and McAlinden are "rapidly exploring" whether an early sale of some of the business and assets can be secured.
Nimmo, who is also UK Head of Restructuring at KPMG, commented, "Ultimately this has led to the unfortunate demise of a well-known and highly-regarded business. We will be holding a stock clearance event, and are grateful to the remaining staff for their efforts and assistance at this difficult time. We are working closely with Skills Development Scotland, via their PACE team, and JobCentre Plus to support the staff who have been made redundant. We would encourage any party who has an interest in acquiring the business and its assets to contact us as soon as possible."
