Maplin’s fate will be decided tomorrow as its private equity owner seeks to find a buyer for the business before it is forced into administration.
The electronics retailer, which was bought by Rutland Fund Management for £85m in 2014, has a number of liabilities due and is seeking to strike a deal with Edinburgh Woollen Mill.
However, if the two sides fail to agree, Maplin could become the next casualty of the UK high street. City A.M. understands PwC could be appointed to handle the administration, although late yesterday talks were moving ahead on the basis that Maplin would be sold as a solvent business.
Analysts have been touting 2018 as the year of retail failures as the national living wage, rising rents and increases in business rates cripple firms with large property portfolios. Restaurant chains have also been showing significant signs of financial distress.
Stiff competition between non-food retailers has also been pushing down prices. Food retailers have been able to push up prices in response to sterling’s devaluation after the Brexit vote, but heavy discounting in the non-food sector means fashion and furniture retailers have struggled to pass on costs.
Fashion chain East became the first to fail on the high street this year, falling into administration at the end of January.
Its failure came after Jaeger, 99p Stores and Brantano collapsed last year. Deloitte research found retail administrations jumped 28 per cent year-on-year in 2017, the first increase in five years.