Peacocks: Government 'will look into' Cardiff-based retailer
- 18 January 2012
- From the section South East Wales
Welsh Secretary Cheryl Gillan has said the UK government will look at what it can do to help the troubled retailer Peacocks.
But she warned she would not make early or false promises about the future of the Cardiff-based business.
Labour MPs have called on her colleague Business Secretary Vince Cable to take action to help save the company.
Peacocks, which employs more than 400 in Cardiff and 10,000 more across the UK, is in talks over its £240m debts.
It was announced on Tuesday that Peacocks has 10 days' protection from its creditors to find a new investor or it will go into administration.
Mrs Gillan faced a barrage of questions about the Cardiff-based chain at Welsh Questions in the Commons on Wednesday.
She said she had discussed Peacocks with Mr Cable the moment she heard about its problems.
"I have the greatest of sympathy, I have shopped in Peacocks myself and I know how many jobs depend on Peacocks. I think it is important we explore every possibility.
"But I'm not going to stand at this despatch box and make any false promises. We are going to look at what we can do for Peacocks but it will involve the Welsh government as you know."
She added that directly intervening in the company "would not be appropriate until more investigations have been made into the reasons for this reported failure of Peacocks".
Talks with lenders, including Royal Bank of Scotland and Barclays have, so far, failed to find a solution.
All 26 Welsh Labour MPs signed a letter to Mr Cable warning that the firm may be forced into administration because banks are "refusing to provide further working capital".
The letter poses several questions to Mr Cable such as asking what dialogue the UK government has had with Peacocks and its investment syndicate.
It also says: "We would urge you to make immediate inquiries into the company's current finances, trading status and ongoing relationship with RBS, a bank that is, as you know, 80% state owned.
"We believe that the difficulties currently being faced by Peacocks are, in part, due to the economic decisions that the coalition government has taken, in particular the decision to increase VAT, thereby reducing consumer demand and increasing costs for the retail sector.
"We call on you to recognise this fact and to urge the chancellor and your cabinet colleagues to implement a plan for growth that would restore consumer confidence and give a boost to our ailing high street stores, including Peacocks."
A Department for Business, Innovation and Skills spokesperson said: "This is a worrying time for the individuals, families and communities affected by the news that Peacocks has served notice of its intention to go into administration.
"The government is taking action to help shops by extending small business rate relief, maintaining a town centre-first planning policy, scrapping rules which pushed up parking charges, and cutting National Insurance for employers.
"Earlier this month, Mary Portas published her review which has provided a clear vision on how we can create vibrant and diverse town centres and breathe life back into our high streets.
"The government will consider the recommendations carefully and will respond in detail in the spring on how we can take forward measures to support our local high streets and the retailers that play a vital role in our economy."
Peacocks has more than 600 stores and concessions in the UK, and 117 other stores around the world. Its expansion into Russia and eastern Europe was particularly successful.
While continuing to make operating profits, the group's overall financial performance has been weighed down by the level of its debts, which stem from a management buy out in 2006.
Welsh Business Minister Edwina Hart has said she is in contact with the UK government over Peacocks' difficulties.