KPMG administrators charge £5.4m fees for Peacocks since January

KPMG ADMINISTRATORS at collapsed clothing retailer Peacocks have charged £5.4m in fees for their time costs with unsecured creditors, including the taxman, likely to be paid less than 1p for every pound owed.

The budget fashion chain appointed KPMG partners Richard Fleming, Chris Laverty, Ed Boyle and Joff Pope in January this year.

According to the creditor report, the trio estimate unsecured creditors such as HM Revenue & Customs, are likely to receive less than 1p for every £1 owed.

An extract from the report said: “Due to the level of the senior secured lenders’ indebtedness there will only be a very small payment to unsecured creditors of the main trading company.”

It is likely unsecured creditors will receive about 68p for every £100 owed according to the KPMG administrators. Usually, unsecured creditors receive two to three pence for every pound owed when a business goes into administration.

Secured creditors such as banks and other lenders, estimated to be owed £133m, have also been hit by Peacock’s collapse as they are unlikely to receive all money owed, despite having first call on the retailer’s assets.

Laverty said: “Peacocks was the largest retail failure of 2011 and required the mobilisation of a significant team of over 50 KPMG staff, made up of a diverse range of professionals from employee specialists to tax experts.

“The team worked with hundreds of stakeholders to stabilise the business while we sought a buyer on a going concern basis; not least working with 9,600 staff, negotiating with over 150 suppliers, managing 611 stores and 49 concession sites plus interacting with 15 international franchise partners.

“Due to the severity of the indebtedness of the company, senior secured lenders are unlikely to make a full recovery and there will be a very small return to unsecured creditors. We continue to recover value were possible and, to this end, the assignment of leases of closed stores continues apace, as does the collection of international debtors.”

KPMG administrators managed to salvage the majority of the Peacock business through a sale which saved 6,000 jobs and included the acquisition of 388 stores and concessions by Woollen Mill.

However, the administrators could not secure a sale for the remaining business and more than 200 stores were closed with about 3,100 employees made redundant.

The administrators said they were still negotiating deals to sell up 30 former Peacock stores to retailers Poundland, Poundworld and Iceland.

According to a creditor report, the KPMG administrators sold a division within Peacocks Bonmarché in a pre-pack to private equity business Sun European Partners.

Related reading