Saving 9,600 Peacocks

The two girls in this photo work at my local branch of Peacocks. The one on the right is a good friend of mine and has been for 7 years now. Today, she, along with 9,600 others, will go into work unsure of their futures.


Peacocks is a profitable company. In 2011, sales rose by 7.4%, making a profit of £27 million. But it has £240 million pounds worth of debt that has caused the store to go into adminstration. Why so much debt? A management-led buyout led by Richard Kirk in 2005, backed by Goldman Sachs and two private U.S. based hedge funds, saddled the company with enormous debt.


So how do you save Peacocks? The company needs an injection of money, e.g. a buyer. There is speculation than Bon Marche, a women's clothing business owned by Peacocks, will be bought and seperated from its parent company to establish it as an independent brand. Another option being thrown around is for government intervention in stopping RBS, one of Peacock's lenders, from withdrawing support from the company. Liberal Democrat MP, Bob Russell said:


"Is it not the role of government, when it owns the bank, to intervene and can we have a debate?" 


Russell's comments are valid. RBS is owned by the tax-payer after its bailout led to the tax-payer owning an 83% stake in the bank. There is pressure on Business Secretary, Vince Cable to push government intervention and is meeting with Cardiff MPs, where Peacocks is based.


The last option for Peacocks is to adopt the 'John Lewis model.' The model is based on a system, where the company is owned by a trust, operated on behalf of the employees, rather than shareholders. Profit is rewarded to staff in the form of an annual bonus, and effectively create a worker-owned company. For some, this is seen as the way forward for Peacocks. Dr Jonathan Deacon of Newport Business School said to BBC News:


"My ideal would be save this company for Wales, save all those fantastic, innovative, entrepreneurial, creative people in that company. It's got a great management. Why don't we look at an option to think about a workers' buy-out and create another John Lewis? Have a co-operative taking place."


The future is unclear for Peacocks and there is no telling on what will happen. Some jobs have already been lost and the belief is that more will follow. In the mean time, the 9,600 'Peacockers' (what a lovely name) remain hopeful and maybe, just maybe, the company will avoid closure.