The Daily Telegraph
Rescue deal keeps Jones Bootmaker on high street
Historic shoe chain saved from closure following last-minute agreement with turnaround firm Endless
JONES Bootmaker, one of the oldest names on the high street, has been saved from the scrapheap after an eleventh-hour £10.5m deal with turnaround firm Endless.
The 160-year-old company, which has 1,000 employees, was teetering on the brink after owners Alteri called in advisers at KPMG to explore a sale amid tough trading conditions and a winding-up order from its creditors.
Earlier this week, shoe shop stablemate Brantano, also owned by Alteri, collapsed into administration, putting almost 1,100 jobs at risk. PwC is handling the administration and could still secure a deal with a buyer for some of Brantano’s assets.
However, Endless, which also owns Crown Paints, has thrashed out a “prepack” deal for Jones which saves 70 of its 170 shops and the majority of its staff. The pre-pack deal means that Jones will still briefly enter administration before Endless immediately buys back its profitable stores and the brand rights. About 250 jobs will still be lost and about 100 shops are expected to close.
The deal has been reached just 24 hours after negotiations between Alteri and Endless broke down over price.
Sources said that a pre-pack was the only viable option to preserve the future of Jones before it ran out of cash.
There has been a recent resurgence of pre-pack deals with the sale of lingerie firm Agent Provocateur and turkey giant Bernard Matthews.
Upmarket shoe rival Kurt Geiger, which was bought by Cinven in 2015, expressed an initial interest in acquiring Jones Bootmaker before backing out of an auction process. Familyowned chain Pavers also signalled it could take on the business but could not make an offer within the tight time frame.
Jones Bootmaker was started in 1857 when Alfred Jones and his wife Emma opened a footwear shop in Bayswater, London.
Alteri, which is backed by US private equity giant Apollo, bought Jones Bootmaker two years ago in a £12m deal, which included rival shoe retailer Brantano.
Meanwhile, Alteri’s ownership of men’s outfitter Austin Reed also ended in administration last year before the business was sold to Edinburgh Woollen Mill owner Philip Day.
Shoe retailers have emerged as the hardest hit category in the recent retail downturn as dwindling footfall on the high street and a shift in spending towards experiences rather than physical goods have exacerbated the problems caused by higher import costs.
They have also faced rising competition from rival retailers such as Topshop, Zara and Asos moving into their territory and selling more shoes and boots.
Shoe shops suffered their ninth consecutive month of decline in February, recording a 5.2pc fall in spending, according to Barclays, compared with a 0.4pc uptick for the rest of the clothing sector.
Restructuring experts are expecting more casualties on the high street as retailers face soaring costs associated with a weaker pound, rising business rates and the living wage.
The retail sector is forecast to suffer a £2.3bn increase in business rates, while shops in London will experience a rise equivalent to a 6pc rental increase.