Jan 10, 2013
Yesterday, Jessops and PricewaterhouseCoopers (PwC) announced that Jessops is entering administration (equivalent to Chapter 7 Bankruptcy in the U.S.). Jessops has been an integral part of the U.K. camera market since it was founded by Frank Jessop in 1935. In the early 2000s Jessops went on the acquisition trail and bought up many of the U.K.’s independent camera shops. This led Jessops to become the largest chain of camera specialty retailers with more than 200 stores across the country. In 2002, ABN AMRO acquired the company and 2 years later Jessops went public on the London Stock Exchange. In 2007, just ahead of the Global Financial Crisis, Jessops faced financial trouble and entered into a period of restructuring and negotiations with its creditors. In 2009, Jessops Plc was liquidated and Jessops Ltd was created.
Jessops is a victim of the changing nature of photography. The advent of digital and the emergence of alternatives to standalone digital cameras have led to significant changes in the digital camera market. 2012 saw the largest declines in digital camera sales in the U.K. since consumer digital cameras became available in the late 1990s. Printing is the other important arm of Jessops’ business. Analog printing represented a reliable profit generator, while digital printing is a market where 4×6 prints are loss leaders. Profitability from digital printing is under pressure from electronic viewing and sharing, competitive prices from online print, and consumers cherry picking photos to print. Add to this high retail space rental costs and likely expensive arrangements with its creditor HSBC and it becomes clear that Jessops is finding itself in a very tough environment. A tough economy and low U.K. consumer confidence will have further compounded the woes of Jessops.
The loss of Jessops will be a loss for consumers and a loss for the U.K. photo industry. While some of the stores may continue to exist if a buyer emerges it is likely that many stores will be closed. Jessops provides consumers with knowledge and education on digital photography products and services. For companies such as Canon, Nikon, and Sony which offer interchangeable lens cameras (ILCs) Jessops will be key to their channel strategy in the U.K. With no other rival camera specialist chain in the U.K., it is possible that in 2013 there could be a slowdown in the U.K. ILC market if Jessops should go into liquidation. Consumers who rely on the expertise of camera specialist in-store staff may be deterred from purchasing a camera, or may choose to purchase a less expensive camera. No doubt companies such as Canon, Nikon and Sony will be preparing for the loss of sales from Jessops in 2013 should it go under.
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