SKNL a frontrunner to buy out Peacocks

Tuesday, 21 February 2012

Mumbai-based SKNL is in the race to acquire discount fashion chain Peacocks, after it went into administration in January with roughly £750 million of debt after losing the support of key backer Royal Bank of Scotland Group PLC (RBS). There are many other names interested in Peacocks including Edinburgh Woollen Mill and Pakistani textile billionaire Alshair Fiyaz, who is reported to be working with Danish private equity fund Solstra Capital Partners. But according to media reports, the Peacocks chain is in such dire state that any deal to revive its operations would go in vain.

Some 7,500 jobs were placed in jeopardy when Peacocks - which has 563 stores and 48 concessions - and parent company the Peacock Group, collapsed under a debt mountain last month in the biggest retail failure since Woolworths. Three weeks ago, Peacocks’ Bonmarche branded stores were bought for£10 million by Sun European Partners, which said it will keep 230 Bonmarche stores open and close around 160 other stores.

KPMG held more than 100 conversations with potential buyers for the clothing retailer in the 48 hours after it collapsed. But the 'huge interest' appears to have dwindled as SKNL has emerged as the frontrunner to save the business. SKNL, which turned over £667million last year, bought Hartmarx Corporation, an occasional tailor to President Barack Obama, in partnership with British investment firm Emerisque Brands. Elsewhere, it has been reported that retailers including Poundland and Tesco are eyeing up parts of the store portfolio in the event a buyer for all or part of the struggling chain is not found.

Peacocks was the next in line after lingerie chain La Senza and outdoor and sports retailer Blacks Leisure were also placed in administration. The challenging trading conditions for the UK retail sector are pushing companies to the edge.