Pet shop chain to enter administration
A pet supplies shop chain which forms part of agricultural group Wynnstay is to be placed into administration.
In June Wynnstay revealed that its profits had been affected by the poor performance of its Just for Pets retail chain.
Wynnstay has now filed notice to the London Stock Exchange saying it is going to place the retailer – which has 25 stores including in Bentley Bridge, Wolverhampton; New Road, Kidderminster; Ryemarket, Stourbridge and Ketley and Wellington in Telford – into administration, having looked at alternatives including the sale of the business.
The company says Just for Pets has shown a "marked deterioration" over the last year, driven by changes to consumers' spending, greater competition and cost pressures.
Those factors have placed an "increasing strain" on the subsidiary, leading it to make a loss.
Wynnstay chief executive Ken Greetham said: "This has been an extremely difficult decision to make and we are saddened by the announcement of the notice of the intention to appoint administrators for the Just for Pets business.
"Having thoroughly investigated and pursued other options, it has been concluded that this was the correct path to take, both for Just for Pets and Wynnstay, given the difficult circumstances in which Just for Pets has found itself in recent years.
"We will be working closely with advisers to ensure that Just for Pets employees, customers, suppliers and Wynnstay shareholders are best served."
At its half-year results in June, Wynnstay took a £3.9 million hit on writing down part of the value of the ailing pet supplies chain.
That meant that pre-tax profits at the group fell from £4.08 million to just £130,000, despite group sales increasing by 6.3 per cent to £205.3 million in the six-month period.
In the first half of the year Just for Pets generated £7 million of revenues, which represented about three per cent of Wynnstay's total revenues for the period, and made an operating loss of £0.25 million.
The company's total adjusted operating profit for the same period was £4.24m.