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Play.com pulls out of Jersey

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10th Jan 2013
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Play.com has become the latest victim in the shifting retail market after confirming it will shut down its direct retail business in Jersey.

From March the firm will become a marketplace-only vendor. Play.com said in a statement: “Moving forward we are intending to focus exclusively on our successful marketplace, which is our main business area, and to phase out the direct-retail part of our business.”

The online retailer blamed the move on the scrapping of the Low Value Consignment Relief (LVCR) which allowed items less than £15, such as CDs, games and DVDs, to be sold to the UK VAT-free.

The government closed the LVCR loophole, which was thought to have cost the exchequer about £130m in lost VAT, in April 2012 in a bid to “take action to end exploitation of the rules”.

The Jersey and Guernsey governments were quick to launch a legal challenge against the decision announced in the Autumn Statement, but failed to reverse the policy. Since April last year around 600 people have lost their jobs in Jersey because of the end of LVCR.

Jersey's economic development minister, senator Alan Maclean, told the BBC: “I'm saddened, this is a Jersey business, set up in the island that did extraordinarily well, that became a global brand. We will work with other businesses and entrepreneurs to help them develop the next Play.com.”

Any remaining staff in the restructured company will be based in Cambridge.

In September 2011 Japanese e-commerce operator Rakuten paid £25m for Play.com.

* * *

Jessops falls into administration

The flagging retail market was dealt another blow this week with news that camera specialist Jessops had gone into administration.

PwC was appointed as administrators and said it was inevitable that jobs would be lost and shops closed after depressed consumer sales hit the major high-street retailer.

PwC said its core marketplace has seen a significant decline in 2012 and forecasts for 2013 indicated that this decline would continue. In particular, the position deteriorated in the run up to Christmas “as a result of reducing confidence in UK retail”.

Edward Williams, Rob Hunt and Matthew Hammond of PwC were appointed joint administrators of The Jessop Group on 9 January.

Additional funding was made available to the company but it did not generate the profits it had planned, which had a consequent impact on its funding needs.

Rob Hunt, partner at PwC said: “Over the last few days the directors, funders and key suppliers have been in discussions as regards additional consensual financial support for the business. However these discussions have not been successful. In light of these irreconcilable differences the directors decided to appoint administrators and we were appointed earlier today.

“Our most pressing task is to review the company's financial position and hold discussions with its principal stakeholders to see if the business can be preserved. Trading in the stores is hoped to continue today but is critically dependent on these ongoing discussions. However, in the current economic climate it is inevitable that there will be store closures.”

Turnover in the year to 31 December 2012 was £236m and Jessops operated from 192 stores with around 2,000 employees. 

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Replies (5)

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By cyrynpen
10th Jan 2013 18:44

Depressing
This is just so depressing! When is it all going to end? Will we just have supermarkets left?

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By deg2yq
10th Jan 2013 21:04

next election conservatives will not win more than 150 seats. They have even less of a clue about SME  or private enterprise and small business startup than labour.

It is all old money and old boys club.

Can't wait to see the back of them.

I voted for them last time... first thing they did was to raise VAT an wipe out a good few of my clients.

 

 

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Replying to Ruddles:
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By Ken Howard
11th Jan 2013 14:26

What's that got to do with small businesses?

deg2yq wrote:

next election conservatives will not win more than 150 seats. They have even less of a clue about SME  or private enterprise and small business startup than labour.

It is all old money and old boys club.

Can't wait to see the back of them.

I voted for them last time... first thing they did was to raise VAT an wipe out a good few of my clients.

Jessops and play.com aren't small businesses, so I'm not sure how your rant about the Tories is relevant to this thread.

Surely the removal of two big players from the economy should be good for smaller business competitors who may be able to get some of their business.

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By alan159
11th Jan 2013 11:50

Unfair to blame the coalition government for trying to sort out the mess left by 13 years of Labour mis-management.

Every Labour government has ended with it running out of money and the Conservatives have had to sort their mess out.

The Conservitives may well lose the next election, but that doesn't mean they are wrong, most people have no idea about their own finances let alone the country's!

Job losses are always sad, but jersey has its own government, it is not the job of the UK government to worry about jobs in Jersey - they cost the Exchequer enough as it is with hosting aggressive tax avoidance factories.

 

 

 

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Chris M
By mr. mischief
14th Jan 2013 07:51

My thoughts

I was on the streets in 1997 campaigning for Labour.  Three reasons:

1.  Financial credibility.

2.  Ethical foreign policy.

3.  100% commitment to no sleaze.

Thirteen years later and not only had these policies been binned, they'd been stomped all over and incinerated.  I handed back my card in 2003 when we decided our foreign policy was going to be "Yes siree George".

In 2010 someone I canvassed with in 1997 knocked on the door to ask for my vote.  I said not only was I no longer a member, it didn't seem likely to me I would be voting Labour for at least 10 years.

No reason to change that view.  People have short memories and might vote them back in, if they do then say your prayers.

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