Survival scheme for electronics firm Peats, 27 jobs saved
THE High Court has approved a survival scheme for electrical retailer Peats which reversed its decision to cease trading earlier this year.
The scheme involves investment by the Peat family which will mean two of its 11 stores will continue to trade and 27 jobs are saved, the court heard.
Mr Justice Peter Charlton said he was happy to approve the scheme taking Peats World of Electronics out of examinship after hearing all conditions set down in an independent accountant's report for its survival had been met.
These include that two of its Dublin stores, the original Peats of Parnell Street and another in Rathmines are to continue trading.
A total of 27 jobs have been saved, down from 70.
The judge noted that Revenue, which the court heard previously is owed €319,000, is to receive most of what is owed to it, while unsecured creditors will be getting a two per cent dividend.
This meant there was a saving to the Exchequer of €163,000 in redundancy payments and that creditors will get something rather than nothing had the company been wound up, he said.
He also noted there had been a waiver of rent due to the Peat family for €390,000 and a rent holiday for 12 months in relation to the Parnell Street and Rathmines stores.
In addition, there was a cash investment from Peats chairman Ben Peat and from Josephine Peat of €140,000 in working capital and €15,000 in equity, he said.
It was clear to the judge the company is capable of survival and the economy will benefit from the saving of jobs.
If it was liquidated the position of creditors would be worse than if this scheme was approved, he added.
In their petition to the court last April, the directors of Peats said, while incorporated in 1963, the company had its origins in a family business dating back to 1934.
William and Brigid Peat set up a shop then 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 €23.4m, 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 €10m this year.
Other problems included high rents.