Jobs at risk as rent-to-own retailer BrightHouse collapses

More than 2400 jobs are at risk after rent-to-own retailer BrightHouse entered administration on Monday, just days after it closed all its stores due to the coronavirus outbreak.

The company, which has a number of stores in Scotland, appointed Grant Thornton to keep running the business, and collecting money from customers.

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 Bebgies 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 let customers buy household items, such as a washing machine, in exchange for small weekly payments.

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 £15m in redress to almost 250,000 customers after the FCA found it had not acted as a responsible lender.

Administrators were appointed to Caversham Finance Limited, which trades as BrightHouse, and Caversham Trading Limited (CTL), which supports the business’s logistics, warranty and insurance claims, on Monday morning.

The business had already closed stores and started working remotely before administrators were appointed, in response to the coronavirus outbreak.

The administrators said the logistics and engineering arm of the business would continue to repair customers’ items and deliver smaller items.

It comes a year after BrightHouse axed 30 stores across Britain, hitting 350 employees.