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Rent Day causes wave of closures

The quarterly ‘rent day’ today (June 24) has caused several chain stores to go into administration, and others to issue profits warnings.

Many retailers are due to pay their quarterly rent today, but financial difficulties have left several unable to pay, leaving them to enter administration, close down stores or be broken up and sold.

Home furnishings chain Habitat was the first to announce it would go into administration, causing 900 job losses. Home Retail Group, the owners of Argos, announced that it would buy parts of Habitat in a £20 million deal.

An unnamed retail analyst said: "I don't think this is a marriage made in heaven. It's like jumping into a swimming pool with a lump of concrete tied round your neck. Habitat has never made any money and Home Retail has got enough problems of its own.

"In the early days Habitat was interesting, innovative and quite successful but only people with extremely long memories can remember its best days."

Moben Kitchens and Dolphin Bathrooms, both owned by HomeForm, have also gone into administration. However, other chains owned by HomeForm’s parent company Sun Capital Partners including Kitchens Direct and Sharps are expected to be saved although no deal has yet been announced.

The closure of Moben Kitchens and Dolphin Bathrooms will leave a further 1,300 people unemployed.
Clothing chain Jane Norman is also in trouble and expected to be sold within the next 72 hours. Scottish clothing group Edinburgh Woollen Mill is among the bidders, as is Debenhams, which hosts Jane Norman concessions in its stores. The fashion chain currently has debts of £140 million.

Smaller companies have also been affected. New grocery chain Haldanes has collapsed, with 600 job losses and 23 out of 26 stores being shut.

Other companies issuing profits warnings included Dixons Group Plc, owners of electrical chain stores including Dixons, Currys and PC World, making a loss of just under £225 million.

Source : Holly Jones - Inspiresme.co.uk
www.inspiresme.co.uk/news/premises/‘rent-day’-causes-wave-of-closures-03834/

24 June 2011
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