FYI - Jessops goes into administration

[thequacksoflife]

http://www.bbc.co.uk/news/business-20958659

Sad for customers and especially those staff who may lose jobs

[Donald]

Sad for customers and especially those staff who may lose jobs

Indeed. And, of course, one of our recent most active members, Robin (Black Pearl) is one of those members of staff.

[Daisy Mae]

Very sad for the staff and a lost sales opportunity for those of us who like to 'heft the gear' before purchase. Jessops has been a tragedy waiting to happen with almost no stock on the shelves and 'just in time' ordering.

So it's PC World or Amazon now then. :/

[AndyB1975]

Thanks for highlighting this.

Whilst I feel sad for the staff of any stores that will close, I am extremly annoyed that they will now not honour any gift vouchers.

I was bought a gift voucher for Christmas which is now wasted money for the person who purchased it.

Head Office will obviously have known this was coming and you would have thought they would have put a stop to any gift voucher sales leading up to this.

It seems extremly convienient that they go into administration just after Christmas. They have basically robbed people!!!

[Tringa]

This is bad news and as always it is those at the sharp end who bear the brunt of it.

Hope things work out for you soon Black Pearl.

Dave

[JPS]

I used one of Jessops gift vouchers for a training course sometime ago, which I must say very good. My brother also had a voucher and when he spoke to Jessops in October / November time the 'only' lady who deals with booking courses (London) had aleady been let go. I now know why and agree 'Rip off' and as you might of guessed my brother has now lost his £119.
John

[thequacksoflife]

John - did your brother buy it through a credit card? if so try the credit card company you get some cover via them.

[Black Pearl]

Personally I'm hoping all is not lost.

The company makes money, has a viable business model and a very strong highstreet brand. I can't see it surviving in its present form and I'd guess at lots of store closures but there are some very strong stores, my Centre of Excellence is recent and is belting out huge numbers.
From what I've been told and what I've read there has been a break down, only in the last day or so, in parts of the supply chain. Anything bought or promised until really just today would have been in good faith and I feel it's a little unfair to say you have been ripped off. Not honouring vouchers, not taking orders etc is standard administration practice but if the company can survive these processes will go back I place.

I thank the members above for their thoughts and if you were planning on buying from Jessops in the near future I'd urge you to still do so - they and me personally need the business if we're to still have a highstreet with more than just nail bars, money exchange companies and fast food outlets.

[JPS]

Personally I'm hoping all is not lost.

The company makes money, has a viable business model and a very strong highstreet brand. I can't see it surviving in its present form and I'd guess at lots of store closures but there are some very strong stores, my Centre of Excellence is recent and is belting out huge numbers.
From what I've been told and what I've read there has been a break down, only in the last day or so, in parts of the supply chain. Anything bought or promised until really just today would have been in good faith and I feel it's a little unfair to say you have been ripped off. Not honouring vouchers, not taking orders etc is standard administration practice but if the company can survive these processes will go back I place.

I thank the members above for their thoughts and if you were planning on buying from Jessops in the near future I'd urge you to still do so - they and me personally need the business if we're to still have a highstreet with more than just nail bars, money exchange companies and fast food outlets.

Robin,
I hope you are right, for everyones sake.
Best wishes and good luck to you and your staff.
Regards
John

[AndyB1975]

Personally I'm hoping all is not lost.

The company makes money, has a viable business model and a very strong highstreet brand. I can't see it surviving in its present form and I'd guess at lots of store closures but there are some very strong stores, my Centre of Excellence is recent and is belting out huge numbers.
From what I've been told and what I've read there has been a break down, only in the last day or so, in parts of the supply chain. Anything bought or promised until really just today would have been in good faith and I feel it's a little unfair to say you have been ripped off. Not honouring vouchers, not taking orders etc is standard administration practice but if the company can survive these processes will go back I place.

I thank the members above for their thoughts and if you were planning on buying from Jessops in the near future I'd urge you to still do so - they and me personally need the business if we're to still have a highstreet with more than just nail bars, money exchange companies and fast food outlets.

I also hope all is not lost and will keep my fingers crossed that the business can find a way out of the situation and continue trading. As you say its sad to see our high streets full of empty shops. I have just watched a very large, long established construction supplies merchant go through exactly the same process and thankfully come out the other side, although with less branches, so I will be keeping my fingers crossed for you all. It must be a very worrying time for all the staff, especially at this time of year.

Unfortunatly I can't agree that it was a sudden thing, everyone has know that the company has been struggling for some time, and the board of directors would have known exactly what was coming. They were obviously trying to avoid it and were hoping the Christmas sales could offer them a boost and rightly so. My only gripe is that at this point they should then stop the process of selling vouchers knowing what could happen. Especially when they are sold on the basis that the vouchers can be topped up and used a savings card as such. I am not blaming or accusing any shop floor staff of miss-selling or anything underhand at all.

Good luck Robin, I hope this all has a happy ending for you all.

[Adrian]

I have avoided Jessops for quite some time. Where I live (Guildford) they compete with a local London Camera Exchange, and any enthusiast got far better advice and much more personal attention from LCE. Jessops seemed to be staffed by young adults who were selling "features" but it was evident that there was no real knowledge to support this. "Brand specialists" underlined a background of ignorance rather than knowledge, as they took such a dog eat dog partisan approach between sales staff and you could watch them engage in "Canon's better than Fuji" / "oh no its not", posturing.

The shop is also uninviting, as there are stands full of cheapish point and shoot cameras, all of which are wired down, and you have to squeeze past a row of people trying to operate the digital photo printing booths. The strategy seemed confused: no high end expertise, staff who are clearly not enthusiast photographers, and prices that are nothing special. In the last couple of years all of our high street purchases have been from LSE (who also have a thriving used / trade in business).

Oddly enough I know the Chairman of Jessops, who is a turnaround specialist: I used to work with him years ago and he is a good guy: though he has not been on board long. The debt equity swap and the appointment of a turnaround chairman made it obvious that Jessops was in deep trouble. The business plan, with lots of retail stores has high fixed costs. The business is undiversified and directionally confused as the low end market has gone to mobile phones (which can produce good results now) and the high end market is fully captured by the specialist shops. Jessops was not cheap enough in the on-line segment nor sufficiently differentiated.

My expectation is that even if it survives administration, the business model is unworkable and it will collapse again. It needs to strip back to a handful of specialist stores and develop a proper, price competitive, on-line presence that competes effectively with the grey market but with less consumer risk. This will be an uphill struggle.

[arith]

Jessops, I bought all my stuff from the 1970's onward until the internet from Jessops. They had the most helpful staff and now there isn't a single High st camera shop apart from an independent who says and sells junk.

Did I hear something about swaps, was they influenced by Libor rigging? Trying my best to get my head around finance but I find I'm just not devious enough.

Will have to look that up, but I will no longer be able to try out stuff or buy Jessops own make again, and I wanted a new monopod.

[Adrian]

No, it has nothing to do with the (overblown in the media) Libor rigging issue. Jessops has been close to bankruptcy before and their bank previously agreed to exchange debt (bank overdraft or loans if you like) for shares in he company. This is a "debt for equity" swap. What it tells us is that Jessops had over expanded and taken on much too much borrowing to fund that expansion. The transfer of consumer business to an internet model, the rise of mobile phone cameras and the recession in the UK will all have contributed to business difficulties. Chains with lots of shops have very high fixed costs: property and payroll largely. This makes it hard for them to adjust when recessions hit.

The fact is that as enthusiast photographers if we don't support our local camera shops by buying from them at least some of the time, then we will inevitably lose them. They need to compete with internet businesses shipping goods from Hong Kong and possibly avoiding duty and tax. The major manufacturers like Canon, try to protect the local markets and their retail network, by constraining warranty coverage. If we try goods in our local shop and then buy cheaper from the internet, the local shop will soon fold.

Jessops is partially a casualty of this, but fundamentally in my view the business model was deeply flawed and Jessops reacted to this too slowly and too late.

Adrian

[arith]

I don't think Libor rigging was overblown but in fact understated. Fanny Mae and Freddie Mac didn't seem too impressed with the fraud and some have asked for the extermination of UBS.

However, it appears to my financially illiterate brain that equity was exchanged for debt instead of actual money to a bank that could be betting on a default.

The only similar financial instrument I can find in definitions is a CDS, some swaps are based on Libor. This just looks like an insurance scheme.

"Investopedia explains 'Credit Default Swap - CDS'
The buyer of a credit default swap receives credit protection, whereas the seller of the swap guarantees the credit worthiness of the debt security. In doing so, the risk of default is transferred from the holder of the fixed income security to the seller of the swap. For example, the buyer of a credit default swap will be entitled to the par value of the contract by the seller of the swap, should the third party default on payments. By purchasing a swap, the buyer is transferring the risk that a debt security will default.

Read more: http://www.investopedia.com/terms/c/creditdefaultswap.asp#ixzz2HfZEAGrJ"

[Andrew1]

192 stores in that geographical area seems a bit extreme to me. Hopefully getting that down to a workable level will be the answer and many people will keep their jobs. Adrian's comments regarding the knowledge level of staff is certainly a contributing factor as well. If I am a newbie and am going to spend over $1000 on camera equipment, if the staff can't competently help me I'm going elsewhere. If I'm a knowledgeable photographer and know more than the sales person then they add nothing and I will go entirely on price. If that's on-line so-be-it. I am not going to pay a large premium to put gas in the owners Porsche.

Hopefully everything works out well for all concerned.

[Adrian]

All stores are now closed as of close of business on Friday as confirmed by PwC. All stock is being collected from shops and returned to a central warehouse and will be returned to suppliers. Supplier support for an ongoing business was not forthcoming, so clearly Canon, Nikon etc were not interested in financing this distribution network.

Credit default swaps were not involved and are not relevant to this type of activity. The earlier HSBC refinancing was a simple debt equity swap. Very common. Irrelevant to the closure as it was three years ago.

Very sad for employees. Further holes in the high street too. Even prosperous town centres have plenty of vacancies these days. Not a good time to be in small retail commercial property.

[evan47]

its a real shame that jessops, and recently jacobs have closed. i feel very sorry for all the staff members losing their jobs in the current economic situation.
at the end of the day they just could not compete with competition from internet retailers.
i had a look for the nikon mb-d11 battery grip and en-el 15 battery last night. jessops price for the pair was £289.95. the same products on amazon with free next day delivery was £190 for the pair (genuine uk stock too). they arrived this afternoon as promised. i could have taken a risk and and ordered from overseas and saved a further £60 but did not want to trust a grey import. the days of high street retailers are numbered, they have become no more than showrooms where people can view and handle the product, go home, find the cheapest price on google and then make a purchase.

[rpcrowe]

It is very difficult for a brick and mortar store to remain in business when competing with the Internet camera gear vendors. Adorama and B&H in New York City seem to have achieved a viable business model having both brick and mortar locations and a large Internet business operation.

Another problem is the fleeting time of ascendancy of digital cameras. In the days of film, it seemed like good cameras were in production for a longer time before a new model came out and caused them to be obsolete. As an example: the Leica M-2; 35mm rangefinder camera was produced from 1957 through 1958. That's eleven years of production.

The longevity of the film camera models allowed brick and mortar stores more stability in stocking goods. After all, try selling an eleven year old "new" digital camera... Or even a "new" camera produced four years ago. Of course, the brick and mortar stores did not have the Internet competition. However, magazines like Popular Photography ran ads from the stores like B&H and Adorama which severely undercut the local prices...

The Canon 7D is an amazing model in that it has been in producton since Fall of 2009. Three years is an eternity for a digital camera! I am suspecting that once the 7D is replaced, there may be a lot of used 7D cameras on the market. When the law of supply and demand goes into effect and the used prices get lower, I will replace my 30D with a second 7D and then use my 40D as a back up in the way I use my 30D now... The 30D will not lose as much in that time since it is already a low priced camera...

[Melkus]

We see that happen a lot here in the State, small Mom and Pops stores that's been around forever closing there doors because they can't compete with big name stores one of which is Walmart, it's sad but that's how things are going

[davidedric]

Just heard on the news - all the stores are closing tonight. Very sad and end of an era.