Dublin electrical retailer Peats World of Electronics has reversed its decision to cease trading, has reopened one store and hopes to reopen three others saving up to 37 jobs.
The company secured High Court protection today after presenting a petition seeking appointment of an examiner, to be heard on May 3rd.
The company, which announced earlier this month it was closing its 11 stores and intended to seek liquidation, told Mr Justice Peter Charleton it had reversed that decision on the basis of advice its operation has a reasonable prospect of survival provided certain conditions are met, including reaching agreements with landlords.
The company reopened its store in Rathmines today and plans to shortly re-open three others - the flagship Peats store on Dublin’s Parnell Street and its stores at the Pavilions shopping centre, Swords, and at St Stephen’s Green.
In a statement on its website, the retailer explained its decision to continue trading, saying "due to the goodwill and understanding of the company's suppliers, a wave of goodwill from customers and a subsequent reassessment of the company's stock, debts and liabilities in light of the closure, alternative solutions have emerged".
The re-establishment of the brand has now been put forward as the best option for the company to deal with its liabilities while offering the sustainable prospect of future viability for the business, it added.
Chairman Ben Peat said: "It is with great joy that we make this announcement. Earlier this month I believed that Peat’s had reached the end of the road as the changing marketplace and higher rents put unsustainable pressure on our business."
He described reaction to the original decision to close the busiess as "phenomenal".
"In particular, the flexibility of our staff, our suppliers and other creditors has allowed us to re-evaluate and re-design our business model to establish a lower cost model for future operations."
He said three generations of the Peat family had worked in the business before its closure. "With an on-going family involvement and some fresh investment, I intend to drive the business forward while retaining the ethos and character of the business that made it a household name in Dublin," Mr Peat said.
The reatiler said it would hold a "re-opening sale" in the Parnell Street branch on Saturday next.
The Rathmines and Parnell Street stores, whose landlords are connected to the company, will trade rent free for a year to allow them regain their trading position.
The re-opening of other stores is considered unlikely unless landlords make proposals which would justify that, the directors said.
In court, Rossa Fanning, for W B Peat & Company Ltd, said, given the decision to seek appointment of an examiner, the company would not proceed tomorrow with seeking its winding up at a meeting of creditors. Instead, creditors would be advised a petition for examinership had been presented to the High Court.
Asked by the judge what had prompted the decision to petition for examinership, counsel said, while the company did not intend to get involved in a “blame game”, it was initially advised it had no reasonable prospect of survival. However, after announcing its closure, other accountants had advised it had such a prospect.
The situation was “unusual” but the directors believed they could re-open various stores, including the Parnell Street outlet next Saturday. The Tallaght store had re-opened earlier, he said.
Mr Justice Charleton noted the company had secured court protection with the presentation of the petition, fixed the petition for hearing on May 3rd and made directions for its notification and advertisement.
Earlier, Mr Fanning said, while the company had historically met all its revenue obligations, there was a debt of €319,000 for VAT and PAYE/PRSI liabilities for 2012.
In the petition, the directors of the company said, while incorporated in 1963, the company had its origins in a family business dating back to 1934 when William and Brigid Peat set up a shop at Parnell Street to sell wet cell batteries, bicycles, furniture and prams. All six of their children had joined the business.
The company’s business grew year-on-year and was inherently always profitable, employing 90 people at its peak. To grow its business, it had decided to expand through opening new stores trading as Sony Centre stores, a single brand store show-casing the entire range offered by Sony. The company also opened five stores under the Peats brand between 2005 and 2011.
The most obvious reason for its financial difficulties was the precipitous decline in its turnover since 2008 the directors said. Turnover peaked in the financial year ended March 2008 at €23.4 million, three times the 1998 figure.
The economic downturn plus the waning of the Sony brand from about 2007 negatively affected business. Sales declined more rapidly in the Sony stores than the Peats stores and overall turnover fell to just over €10 million this year. Other problems included high rents.
A significant part of the company’s future strategy would be on maximising internet sales, the directors said. The company’s cash reserves of €775,000 would provide a dividend under a scheme of arrangement. The company intended to generate cash through sales form the outset of the period of court protection and it was envisaged, if examinership failed, the position of creditors would be no worse.
