Jessops, owned by Dragons’ Den star Peter Jones, is on the brink of closure due to unpaid taxes. Here is a summary of the developments leading to this critical juncture:
- Jessops has entered administration three times in the last four years.
- Sales have declined by 7.5%, resulting in a loss of £1.2 million.
- A winding-up petition by HMRC could lead to insolvency if the tax debt is not cleared.
- Jessops’ heritage and reputation continue to bolster its customer loyalty amidst these financial challenges.
Jessops, the camera retail chain owned by Dragons’ Den investor Peter Jones, faces potential closure due to unpaid taxes. This development represents a crucial moment for the struggling retailer, which has entered administration three times in the past four years.
Financial disclosures reveal that Jessops’ sales dropped by 7.5% to £19.97 million for the fiscal year ending October 1, 2023, down from £21.58 million the previous year. This decline has resulted in a loss of £1.2 million, increasing the company’s total net liabilities to £16.9 million.
The winding-up petition from HMRC, as indicated in court filings, could be withdrawn if Jessops is able to settle its tax arrears. HMRC typically collaborates with companies regarding unpaid taxes, turning to court orders only when negotiations fail. The retailer’s long-standing financial struggles make this situation particularly precarious.
Founded in 1935 in Leicester by Frank Jessop, the chain thrived under Alan Jessop’s leadership as personal photography gained popularity. After changing hands and enduring multiple ownership changes, it faced significant challenges, including a £116 million acquisition by ABN Amro in 2002 and a debt-for-equity swap by HSBC in 2009 during the financial crisis, resulting in the closure of 80 out of 300 stores.
In 2013, Jessops entered administration once more and was acquired by PJ Investment Group, Peter Jones’s investment vehicle. Jones revitalised the brand by enhancing online sales and reopening stores across the country. However, the rise of smartphones with advanced cameras has significantly impacted high street sales of traditional photography equipment. In response, Jessops has refocused its efforts towards a new generation of social media influencers on platforms like TikTok and Instagram.
Despite these hurdles, Jessops remains optimistic about its future. The company states, “The group’s strong heritage, trust, and awareness of the Jessops brand and reputation for quality continue to be the driving force behind our customer loyalty and highly regarded position in the imaging sector.”
The broader context reflects increased pressures from HMRC, which, after being restrained from issuing winding-up petitions during the pandemic, is now compelled to act with total tax debt reaching £45.9 billion as of March last year. Analysis by PwC indicates a 44% rise in winding-up petitions in April 2023, highlighting intensified demands from HMRC, local authorities, and businesses.
The outcome for Jessops hinges on resolving its tax debts amidst a challenging financial landscape.
