Canon zooms in on £10m deal to help Jessops

JAPANESE CAMERA giant Canon is poised to step in and come to the rescue of Jessops, as the ailing high street retailer battles with fierce competition online.

The Tokyo-based company is expected to pump up to £10m in cash into the loss-making chain, which runs more than 200 stores, according to reports this weekend.

Jessops, Britain’s only specialist nationwide camera retailer, came close to collapse three years ago but was saved from administration by its main lender HSBC in a debt-for-equity swap that saw it taken off the stock market.

The bank took a 50 per cent stake in the business in return for writing off £34m of loans.

The company posted a pre-tax loss of £12m for the year to 2 January 2011, on turnover of £304.6m. But like-for-like sales rose 5.1 per cent and online activity showed 94 per cent growth.

Canon is thought to be prepared to prop up the chain because it values Jessops presence on the high street as a place where shoppers can test its specialist products before buying them.

Jessops, Canon and HSBC were unavailable for comment.

Founded in Leicester in 1935 by the Jessop family, the camera chain has struggled over recent years due to competition from point-and-shoot compact cameras and increasing use of camera phones.

The chain, which was owned by the private equity arm of ABN Amro before floating in 2004, was also seen as a victim of over-ambitious debt-fuelled expansion plans.

In 2007, sales collapsed and the group issued a string of profit warnings. One hundred stores were closed and 500 jobs axed.

Since its rescue by HSBC in 2009, Jessops, led by chief executive Trevor Moore, has made efforts to revamp its stores and boost its online presence as part of efforts to turn the business around.

It has refurbished stores with a new black store frontage and so-called play tables that allow customers to look at cameras as opposed to traditional cabinet displays.

Last month it emerged that HSBC had been holding talks with restructuring specialists Zolfo Cooper to explore options for the chain, including a potential sale in the coming year.

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