Andrew Hebden is Assistant Editor (Business) of The Journal »
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Formerly editor of a national business lifestyle magazine, Jez Davison is a business writer for the Evening Gazette in Teesside »
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Paul Williamson is Senior Partner at Deloitte »
Stephen Hall is Tax Partner at Deloitte »The apparent fire-sale of the stores belonging to The Officers Club represents a sad end to 2008 for North East business.
This Cramlington company has been established since 1992 and, with some 180 shops across the UK, is an important part of many British high streets.
Although the exact scale of the difficulties encountered by the company remain to be seen, the signs are extremely ominous and its chances of surviving much longer seem slim.
Sadly, the Officers Club has many of the characteristics of the type of business that is most at risk in the current economic climate.
It is no secret that life is tough for all retailers at the moment.
And if you are an independent competing at the discount-end of the fashion market against the likes of Primark and TK Maxx, it's all the more so.
The Officers Club has a large property portfolio which means that overheads will be significant and that is a real drain once sales start to stagnate. The company made a loss of around £750,000 in its last financial year, according to its latest accounts.
The timing of the company's demise comes as little surprise, with Christmas around the corner. Like many other directors working in the retail sector, its owners could have been forgiven for thinking that the festive period may have been one last chance for a big push.
For a business that has always traded on the virtues of its huge discounts, the sight of a high street where everyone is slashing their prices must have been a difficult one for The Officers Club.
In truth, the company has struggled ever since 2005 when the retailer was found guilty of misleading customers with its "70% off" slogans which had been regarded as the secret of its success.
It has struggled to post a profit since and could have been regarded as something of a sitting duck when the recessionary wave approached. The fact that it has apparently fallen down so soon into the downturn tell its own sorry story.
UPDATE, DECEMBER 24
The news last night that a business led by Officers Club founder Dave Charlton is to buy the bulk of the stores from the chain after it was placed into administration is good news for all concerned.
Mr Charlton clearly believes that, by starting afresh, he can rebuild the business in this challenging retail environment. It will be interesting to chart the firm's progress.
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