THE UK’s biggest camera retailer today unveiled a survival deal which secures 2,000 jobs but leaves its bank owning almost half of the firm.
Struggling Jessops is laden with debt and said its only alternative was insolvency because suppliers were unwilling to support it in the run-up to the key Christmas trading period.
The Leicester-based firm, which has more than 200 stores, is selling its assets to a new company 47% owned by HSBC and 33% owned by pension trustees, with the remaining 20% held by an employee trust.
Just £100,000 will be left to split between shareholders in the old business, Jessops said.
The company began life in 1935 when Frank Jessop opened his first shop in Leicester.
The firm surfed the boom in digital cameras in recent years but struggled when high street and internet competitors muscled into the market, forcing a major overhaul of the group in 2007 and a swathe of store closures.
Jessops, which warned it would breach its lending terms in January, is rushing through the latest restructuring after pressure from HSBC.
HSBC has given the ’new’ Jessops a £54 million loan to pay the debts of the old company but is waiving £34 million of this in return for its 47% share in the bank, leaving the new firm with debts of £20 million.
Without the deal, directors of Jessops said the financial position of the business was "so precarious" that they would have no alternative but to begin formal insolvency proceedings.
Its last trading update reported worsening sales trends, with like-for-like sales down 4.7% for the 12 weeks to August 16.
In May Jessops reported half-year losses of £6.3 million for the six months to March 31 - following on from full-year losses of almost £50 million in the previous financial year.