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Camera store Jessops today admitted that its battle to overcome its crippling debts will leave its shares worth nothing.
Executive chairman David Adams said talks were ongoing with HSBC over the £60 million debt mountain suffocating the company.
But he also warned embattled shareholders that their investments will be wiped out in the restructuring, which could see HSBC take control of Jessops.
Jessops shares, which were trading at around 150p a little over two years ago, fell 4.38p to 2.25p on the news valuing the firm at just £2.3million. Executive chairman David Adams said: "In January we said that we were in discussions with our advisers and HSBC and that it was highly likely that this exercise would involve a fundamental restructuring of our debt. These discussions continue.
"Regrettably however, against the backdrop of the challenging retail environment and the historic level of debt, the board believes that it is unlikely that any value will be attributed to shareholders.
"Nevertheless we are still working with HSBC towards a solvent solution for the business."
Jessops has been hit by ambitious over-expansion in 2004 after its stock market flotation, the boom in digital cameras petering out and competition from rival retailers such as Tesco and the internet.
It today reported losses of £13million for the six months to the end of March against a deficit of £11.2 million the first half last year. Same store sales were down 4.5% and revenues were down 8% to £124million.
Jessops closed 21 stores in February, leaving it with 211 outlets, and axed another 50 head office staff leaving it with 125, down from 375 in less than two years. Further job losses are expected among its store staff of 2000 by the end of July.
Adams said sales in the last eight weeks fell by a less depressing 3.6%.
Reader views (9)
This has been inevitable throughout Jessop's history as a listed company (about ten years). The management never looked more than 6 months ahead into the twin revolutions of internet and digital photography. It was always going to be a difficult transition, but they did nothing to prepare.
Closure is the best option. A camera costs less than a pound to put into a cellphone, and cellphone cameras are now better than the cameras everyone used a few years back. It's too late to turn Jessops, crippled with debt and lease, pension and redundancy liabilities, into a viable business. Canon, Olympus, Panasonic and Nikon need to get round the table and decide how to replace them.
- Sleepy, Exeter UK, 29/05/2009 12:22
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Jesspos has friendly, helpful knowledgeable staff, something no online retailer has. Unless you are truly knowledgeable about cameras and accessories, you will lose out if Jessops folds.
It's not always about the cheapest thing.
I have bought every camera I have owned there, print my photos there, and will contineu to do so.
- Jenny Green, Dalston, London, 28/05/2009 03:18
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Sad to see such a long established firm (founded 1935) go under: my camera came from Jessops and I was happy to pay a little extra so as to be able to hold and try before buying. I wonder though how many people use shops for looking and then buy online. And, apparently, yet another instance of the folly of loading a balance sheet up with debt.
- Tonyb, Melbourne, Australia, 28/05/2009 02:29
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John, Dublin
My camera came from Jessops' online arm about 3 years ago.
Before making your post it might have been worth checking to see if Jessops did have an inline arm.
- Dt, Harrow, UK, 27/05/2009 13:49
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New battery from them for my camera £23
Internet inc P&P £11
same for memory chips.
I wont miss them at all...
- Sean Dempsey, hayes london., 27/05/2009 13:48
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Jessops is a good company with helpful employees. They are selling cameras now at bargain prices, and it's possible that they could overcome their current difficulties. It would be a pity to see them go.
- Kate, London, 27/05/2009 13:07
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It's sad. All these traditional retailers whingeing about online competition. Surely it would have made sense for them to have set up an online arm, trading off what is in many cases an instantly recognisable brand. This is what traditional US bookseller Barnes & Noble did to face down competitive threats from Amazon etc. Barnesandnoble.com is now a thriving business. With that kind of management, it deserves to sink. The shareholders deserve to lose out too. It will encourage focused investment in innovative companies, not inefficient, reactive dinosaurs.
- John, dublin, 27/05/2009 12:23
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They say the camera never lies,
unfortunatly people do?.
Enough Said.
- John L., Scarborough North Yorkshire, U.K., 27/05/2009 10:41
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Jessops looks like it is on the edge of a clff right now, unless it comes up with a new solution to its problems it looks like it is going the same way as Woolworths. Perhaps it should start selling food to compete with Tesco. Frankly why it didnt get into the mobile phone market is beyond me.
- Mr S.Port, London, 27/05/2009 10:25
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