One of the UK’s biggest electronics retailers is racing to find a buyer in an effort to save the business from administration.
Maplin, which was founded in 1972 and has more than 200 stores nationwide, is in talks with several potential buyers and hopes to strike a deal this week.
It is the latest high street chain to face problems and comes weeks after a plan to save Toys R Us UK fell through, putting more than 3,000 jobs at risk.
The electronics chain, which has been backed by private equity house Rutland Partners since 2014, could be bought by Edinburgh Woollen Mill (EWM), which also owns Jaeger, Peacocks and Jane Norman, according to reports.
A spokesman for Maplin said: “We are in advanced talks with a number of parties and expect to be in a position to announce a solvent sale of the business within days.
“Once secured, this will stabilise the business to the benefit of all stakeholders and provide Maplin with the financial firepower to deliver its 2020 multichannel strategy focused on smart tech.”
Maplin is said to be optimistic that the sale will be solvent rather than a pre-pack, which would be good news for the 2,500 people it employs.
However a pre-pack sale – a system which allows the healthy part of a business that has gone into administration to be sold on quickly – will be considered if a deal for a solvent sale cannot be reached.
According to accounts filed at Companies House in January, Maplin recorded a pre-tax loss of £3.9m in 2016-17, which was up from £2.1m in the year before. However, turnover rose to £235.8m from £234.6m the previous year.
A statement to go alongside the accounts described 2016-17 as a “transformational and challenging year” for the business and said that progress had been made on the group’s 2020 Vision strategy.
The retailer hit rocky ground before Christmas when insurers withdrew credit cover having been spooked by falling profits. This resulted in stock shortages which contributed to disappointing sales in the crucial Christmas period.
Oliver Meakin, who recently announced he was stepping down as chief executive of Maplin, told Retail Week in January that Brexit had had an impact on the business. He said: “Pretty much everything we buy is dollar denominated, so our costs have gone up by 15% … When your costs go up by that margin, you cannot shoulder that as a retailer.”