BrightHouse has collapsed into administration – putting jobs in Ipswich and Colchester at risk.
The rent-to-own store appointed administrators Grant Thornton to take over the business, just days after it closed all its stores because of the coronavirus outbreak.
Nationally the chain has 240 stores and employs 2,400 staff.
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The business will still look after customers’ appliances until their contracts run out.
But there will be no new rent-to-own sales, and experts said that customers who are claiming compensation from the company might have to wait for longer than usual.
Non-essential stores across Britain have shut their doors to contain the spread of Covid-19, putting serious pressure on businesses which were already on the brink.
Julie Palmer, a partner at restructuring experts Begbies Traynor, said: “Coronavirus was the final nail in the coffin for BrightHouse.
“It was already wrapped up and squeezed by payment claims against it and new regulations were having a detrimental effect to its business model.
“As soon as its stores closed due to the pandemic it looked inevitable that this business would break.”
Rent-to-own lets customers buy household items, such as a washing machine, in exchange for small weekly payments.
However, critics said these can quickly add up to hundreds of pounds more than the same items cost on the high street.
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In 2018, the Financial Conduct Authority (FCA) proposed there should be a price cap on what companies like BrightHouse can charge, in a bid to protect vulnerable customers.
The watchdog said that some customers had paid up to four times the average retail price for their items due to sky-high interest rates.
A year earlier, BrightHouse had paid out nearly £15 million in redress to almost 250,000 customers after the FCA found it had not acted as a responsible lender.
The business had already closed stores and started working remotely before administrators were appointed, in line with the government guidance during the coronavirus outbreak.
The administrators said the logistics and engineering arm of the business would continue to repair customers’ items and deliver smaller items.
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