The Leeds-based Empire Direct, which had a turnover of £150 million, much of it online, had suffered a downturn in sales mid-year and was also badly affected by the withdrawal of credit insurance to its suppliers in October.  The resulting low stock levels and rising operating losses meant the business could not continue trading and its fourteen stores were closed.  Around 5,800 customers had paid for goods which they have not yet received, and the administrators estimate that only about 4,000 of these will be able to claim a refund from their card issuer. The others can lodge a claim as unsecured creditors, though a dividend appears unlikely.

Miller Brothers hit the buffers for the second time in less than three years.  The slimmed down operation traded from a showroom in Doncaster and online, both under its own name and on behalf of other retailers.  Woolworths was its key customer and its demise, just before Christmas, hastened Millers' own downfall. 

Dial-a-TV offered rental, rent to own and hire purchase deals on a wide range of brown and white goods.  Established in 1991, it gradually widened coverage across England (north of the M4) and last year generated a turnover of around         £6 million.  Around 21,000 customers, including some purchased from Homebuy when that business went under, are up for sale. 

Lower margins

The inevitable shake-out will, of course, eventually help those who survive the current turmoil, but it'll be some time before any can celebrate that prospect.  The severity of the financial crisis and the excesses that led to it suggest that the recovery process will be both painful and protracted. 

DSGi expects 2009 to be challenging across most of its markets and is actively planning and managing the business for negative like for likes.  In the twelve weeks to 10 January, UK sales on that basis fell by around 12% (with Currys doing slightly better than PC World), though the first two weeks of the Sale period produced 2% growth. Gross margins across the group fell by 0.8% with stock levels down by a sixth.  The Group confirmed it is operating within a £400 million committed credit facility which is currently undrawn and available, although it expects to call on this in its final quarter. 

Comet produced better numbers, limiting its like-for-like decline for the ten weeks to 8 January to 2.5%, aided by a strong post-Christmas performance.  It too suffered a drop in gross margins and is reportedly attacking that problem by hitting suppliers for a listing fee (of up to £15,400), a 2% invoice discount and a 0.5% fee for sales and stock data.  Predictably suppliers were outraged, with Comet merely confirming "we are in discussion with individual suppliers and, yes, we are looking for the best value in these difficult times". 

Jessops, the camera specialist, increased like-for-like sales by nearly 4% in the eight weeks to January 25, but it too paid a price with margins four percentage points down on last year.  The previous nine weeks had seen a sales decline of around 8%.  For the year to September, its loss after tax was £50 million.  With net bank debt standing at £57 million, breaching covenants has been a major concern, but executive chairman David Adams believes a fundamental debt restructuring will happen ‘within weeks rather than months'.

Bright spots

Rent-to-buy electricals and furniture specialist BrightHouse has reported an underlying revenue rise of nearly 14% (to £41.7 million) in the quarter to the end of December.   

And John Lewis ended its year to 31 January very strongly.  A poor November with double-digit decline, a welcome if belated two-point rise in December, and then a particularly successful Clearance, with sales of electricals and home technology rising year-on-year by over 15% in the five-week post-Christmas period.  Overall, for the half year to 31 January, electrical sales were 1.1% higher year-on-year, though with three new stores, the like-for-like comparison will like others be negative.

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