More than 800 retail jobs have been lost after receivers stepped in to take control of electrical stores group PowerHouse.
The company has decided to close 93 of its 223 stores on August 29, leaving its 3,000 staff wondering which 813 of them will be told to leave.
PowerHouse placed itself in administration, a protective move allowing it to continue trading from existing stock, after a trade insurer withdrew cover for some of the company’s suppliers.
The company has not yet decided which stores will close or which workers are to be axed but an employee briefing is expected later this week. The remaining shops will stay open while receiver Deloitte & Touche tries to find a buyer.
Nick Dargan, partner at Deloitte & Touche, said: “We are carrying out a rapid assessment of the company’s operations with a view to selling the business as a going concern.”
PowerHouse chief executive Derrick Broomfield said the withdrawal of cover by one of the industry’s major credit insurers had been unexpected, preventing the company from buying stock on existing payment terms.
Trade insurance covers suppliers in the period between delivery of goods to a retailer and receipt of payment. The identity of the insurer, or the reasons for the withdrawal of cover, have not been disclosed.
Mr Broomfield added: “After seven years of successful and profitable trading, we are doing all we can to find a solution to this situation.”
PowerHouse is the UK’s biggest independent electrical retailer and is third overall behind high street giants Dixons and Comet. The company, which was formerly owned by regional electricity companies Midlands, Southern and Eastern, was bought out by its management in 1996.
Sales rose 25% to £399 million in the last financial year but post-tax profits fell sharply to £300,000 from £5.2 million a year earlier. PowerHouse is based in Bicester, Oxfordshire and has eight delivery depots. It expanded its estate in 2001 by acquiring 98 Scottish Power retail stores.