BLAIR Nimmo and Alistair McAlinden, of KPMG UK LLP, were appointed as Joint Administrators of Watt Brothers, last week.
Watt Brothers, a fourth-generation family owned business incorporated in 1915, operates a chain of department stores including its freehold flagship store on Sauchiehall Street, Glasgow and a further 10 leasehold stores across Central Scotland.
The stores sell a wide range of well-known branded products across departments including: fashion, electrical, homeware, jewellery, outdoor pursuits, gifts, health and beauty.
Watt Brothers’ turnover has increased year on year, peaking at approximately £24 million in 2018. However, in line with many retailers, the increased revenue has not translated into profit as they have faced significant margin challenges in recent years. The strain on margins, coupled with increased competition from online and new discount retailers resulted in Watt Brothers generating a loss in 2018.
As trading losses continued during 2019, Watt Brothers embarked on a process to secure new investment into the business. However, this was ultimately unsuccessful, leading to the directors taking the difficult decision to appoint administrators.
Upon appointment, the Joint Administrators had no other option than to make 229 of Watt Brothers’ 306 employees redundant with immediate effect.
The remaining employees have been retained to assist the Joint Administrators to realise the company’s assets, including stock and the freehold property. Joint Administrators are rapidly exploring whether an early sale of some of the business and assets can be secured.
Watt Brothers will continue to trade from the flagship store in Glasgow where a stock clearance event has already begun.
Blair Nimmo, Joint Administrator and UK Head of Restructuring at KPMG, commented: “Despite the director’s tireless efforts to increase margins, cut costs and recapitalise the business, Watt Brothers continued to incur trading losses as a result of the well-publicised challenges being experienced across the retail sector.”
“Ultimately this has led to the unfortunate demise of a well-known and highly-regarded business.”
“We will be holding a stock clearance event, and are grateful to the remaining staff for their efforts and assistance at this difficult time.
“We are working closely with Skills Development Scotland, via their PACE team, and JobCentre Plus to support the staff who have been made redundant.”
“We would encourage any party who has an interest in acquiring the business and its assets to contact us as soon as possible.”