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350 jobs are lost as electrical retailer Empire Direct fails
Lucy Tobin20 Jan 2009
Another High Street name has bitten the dust as electrical retailer Empire Direct collapsed into administration with a loss of 350 jobs.
The chain, which has 14 branches, including two in Essex, and a strong online presence, was hit by poor Christmas sales as spending on big purchases such as televisions and washing machines was reined in.
Administrators KPMG reported that Empire Direct had also been affected by the loss of credit insurance, which protects suppliers from the risk of the retailer defaulting on debt.
Last year, the 25-year-old group had a £152 million turnover but bank overdrafts had hit £10.9 million. The figures had led directors to warn about “the ongoing availability of overdraft facilities” as a potential risk in accounts filed in March last year. Today, its stores and website have been shut down.
Empire Direct was run and half-owned by Bradford-based Madan Showan, whose personal wealth had been valued at £50 million.
Administrator Mark Firmin said: “Empire Direct has been severely affected by the economic downturn and experienced a significant reduction in sales from the middle of last year. The business really suffered when credit insurers withdrew cover in October. Low stock levels and operating losses mean the business cannot continue to trade in administration.”
There was brighter news from European giant Kesa Electricals, owner of Comet, which reported a better-than-expected interim trading statement — although it still revealed like-for-like sales had fallen 5.5%.
Analysts had forecast sales to be much lower. Some had predicted them to drop by 8.8%. Kesa admitted it expected a tough year, but added: “The trading conditions across all our markets were very tough but Comet delivered a strong post-Christmas sales performance, and overall our businesses continued to make good progress.”
Reader views (10)
i also took out megga cover for 5 years and i need to use it but how do i go about it help
- Dee, west midlads, 09/07/2009 14:49
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I was an employer of Empire so unfortunately lost my job but it is still pleasing to see comments from people who appreciated good service. Thank you.
- Andrew Skett, Redditch, England, 11/03/2009 13:01
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hi i had extended five year cover on items baught at empire mega stores does anyone know how i can still claim from it if and when i need to can anyone shed some light on this for me please
- Terry, bradford, 28/02/2009 09:55
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Dave Allsop
It makes me laugh, people are commenting on here disregarding the excellent reputation that Empire Direct had. The service, pricing and total shopping experience highly out weighed the likes of Currys, PC world and Comet. Customers liked the change from the rubbish, half hearted service of "the giants", who also dont care about their staff either. Walk into any Currys or comet and the stores look run down and the staffs really aren’t bothered about you the customer because they are under paid students mainly! The guarantees are extortionate too. Long live the memory of Empire Direct, and lets hope they get a buyer to once again offer the best service around in the electrical retail industry.
- Lee Smith, Doncaster, England, 04/02/2009 16:29
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I found their customer service friendly and helpful and I will miss their service.
- Terry, London, 24/01/2009 11:06
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It's ALWAYS sad to see companies go to the wall. However being involved in the electrical industry I can see why they and others fail. Huge discounts on products to obtain the sales is not the way forward. "Profits" is not a dirty word and without them companies go nowhere. Ok it's a buyers market but again companies need profit to grow. Continual degredation of prices is rife in the electrical industry. Try offering genuine service for a change! Companies claim all sorts of service levels but few actually give it in a tangable way, why? because REAL service costs money! By offering real service customers will stay loyal even, if the selling price is higher than elsewhere.
Companies that were in strife before the recession will not survive it. It is interesting to note one of the directors has a stated worth of £50M, as is the case with a lot of companies, was it not possible to clear the overdraft and allow the company to trade and preserve the jobs?
- Andrew Hankin, Birmingham, 21/01/2009 09:39
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This is a shame, despite other comments, Empire Direct were known for offering very competitive pricing coupled with good value warranties and excellent after sales support. It's a shame for customers who stand to lose orders, but terrible for the 350 employees who find themselves out of work.
- Aidan, Southampton, 20/01/2009 23:59
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After a nasty experience with their customer services all I can say is good riddance to bad rubbish.
- Dave, Basingstoke, 20/01/2009 17:31
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Dave Allsop sums up the people that do not realise the impact of the financial crisis in business and for retailers, especially in this industry. Electrical Retailers have been the second top victims of the financial crisis, after car manufactures.
I respect a company that started of 25 years ago and have actually been successful at competing with Currys and Comet. The number of retailers in this industry have disapeared in times of booms, such as Powerhouse, Miller Brothers and a number of online electrical retailers, proves the sucess of Empire Direct as an established brand and company, that has come along way.
I have shopped with Empire Direct for over 6 years, from their online site now to stores, and I have NEVER been disappointed. Its shocking and upsetting to see Empire Direct disapearing of the highstreet, purly due to the issues in the economy, and especially due to credit insurance.
- Peter Woodry, Doncaster, 20/01/2009 17:16
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Strong online presence? Kidding!! We always shopped elsewhere because we could get products cheaper.
Nothing to do with the credit crunch. They could not keep up with their competitors. These firms come and go.
- Dave Allsop, Derby, 20/01/2009 13:42
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