Brighthouse reportedly on brink of collapse

Rent-to-own retailer Brighthouse is reportedly on the brink of collapse, following an increase in customer compensation claims.

Sky News said the retailer was forced to place ‘Big Four’ accountancy firm Grant Thornton on “standby” to handle a possible administration in the coming weeks, which would place almost 2,400 jobs at risk.

It comes after the retailer reported a £16m loss for the 12 weeks to 28 September 2019 earlier this year. EBITDA loss for the quarter was £3.2m compared with £1m last year.

During the period, the retailer also took out a £5.6m provision for in order to cover customer claims and complaints received.

Brighthouse stated at the time: “We have continued to receive affordability claims from customers which we are required to investigate and, if it is found that the correct procedures have not been followed, reimburse them accordingly.

“The volume of complaints received have been higher than we forecasted and therefore our provision for affordability claims has increased by £5.6m to £12.6m.”

Additionally, in October 2017 it was reported Brightouse was to pay £14.8m in compensation to 250,000 customers due to irresponsible dealings by the Financial Conduct Authority.