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The collapse of Empire Direct could be a harbinger for the wider e-tail and retail channel, market onlookers have warned.
The electrical goods retailer entered administration on 19 January, mirroring the recent collapse of US electricals giant Circuit City.
Administrator KPMG said business at the firm had suffered when credit insurers withdrew cover in October. Low stock levels and operating losses forced it to stop trading.
Further reading
Its 14 stores have been closed and 150 of its staff made redundant.
Nitin Joshi, founder of ChannelMoney, said: “Empire Direct was on the radar to go under, so companies may have started pulling trading with them. There is a massive amount of pressure in the e-tail and retail space at the moment so it will not be the last to fall.”
Jon Love, business development manager at etailer Clove Technology, agreed that it would be a tough year for the sector.
“Empire was a big brand that a lot of people knew and trusted, so I am surprised,” he said.
“But there is already evidence that some of our other competitors are struggling. It is the really large ones that are being hit the hardest as they have larger overheads.”
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Do you agree?
Credit Card customers will get their money back.
I ordered a Toshiba TV from Empire Direct 2 weeks a go and I havent received it. I spoke to my credit card company on Tuesday and they told me that I will get my money back. I have since reorderd the TV from www.digitaldirect.co.uk and they delivered the same TV to me on Friday. Despite being annoyed about the hastle of having to go and order elsewhere I am disappointed that Empire Direct have gone bust because I have been buying from them for about 5 years.
Posted by Graham | 24 Jan 2009
Empire Administration
Empire's asset and funding structure had been off the rails for some three years.. it had all but run out of money in March last year. It was bound to fail in any event
Posted by Riverbonk | 23 Jan 2009
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