This story appeared on the BBC earlier and offers some clarification on the situation with the extended warranties that were sold by Powerhouse which I know a lot of people have been asking for information on, story follows:
The electrical retailer Powerhouse closed 93 of its 233 stores on Friday.
The company went into administrative receivership last week after talks about a rescue package fell through.
More than 800 jobs are to go at the stores.
But customers are also affected – those who have bought goods but not yet received them and those who took out extended warranties.
PowerHouse was created out of the retail arms of three old regional electricity groups – Midlands, Southern and Eastern.
It grew quickly, tripling in size to become the High Street number three behind Dixons and Comet.
Competitive market
But it never really punched its weight in this competitive market, where margins are incredibly low, despite the high cost of white goods.
It had a market share of just 4%.
The business struggled and last year made a profit of only £300,000 on sales of £384m.
Now the accountants are deciding what can be salvaged.
And when it comes to sorting out the remnants of the company, the customers have a long wait to get their money back. The list goes:
Insolvency office
Credit secured against a fixed charge, such as a mortgage – so banks will get their money
Tax office
Credit secured against floating charge – that’s furniture etc
Unsecured creditors – that’s employees, suppliers and customers
Shareholders
There is some hope for people who paid for undelivered goods, and that’s if they paid by credit card.
Helpline
The card companies are “jointly and severally liable” with the retailer, so you can claim if your purchase cost between £100 and £30,000.
There is a helpline for customers – 01869 329450 – or you can e-mail: deloitte@powerhouse.co.uk.
The security of an extended warranty from PowerHouse depends on what type it is.
The three schemes are:
PowerPlan – customers with this should be fine;
ServicePlus – you should be OK, but the administrators cannot yet give a guarantee;
Extracare – you could be in trouble as the money for this warranty was not ringfenced.
Administrator Deloitte & Touche hopes to sell the remaining stores as a going concern, but the brand is unlikely to survive.
“I think this is the end for PowerHouse,” says retail analyst Richard Perks of Mintel.
“I’d be very surprised if a viable business can be rescued from it.
“I think we’ll see that they will get sold off to competitors. Currys and Comet may well pick up some because they’ll be adjacent to their own units.
“And there are a lot of other people looking for stores in this 6,000-8,000 sq ft range – footwear and clothing retailers etc.”
>From Working Lunch on The BBC Site.
Please Note: The “Extracare” warranty mentioned does not affect any other brand using that same name, especially MFI, these other companies are in no way associated with this warranty scheme.