Retailer’s Struggles Continue Amidst Increasing Compensation Claims

  • Brighthouse on brink of collapse
  • Increase in customer compensation claims
  • Grant Thornton placed on standby for possible administration
  • 2,400 jobs at risk
  • £16m loss for 12 weeks to 28 September 2019
  • EBITDA loss of £3.2m compared to last year’s £1m
  • £5.6m provision for customer claims and complaints
  • Affordability claims increased by £5.6m
  • £14.8m compensation to 250,000 customers in 2017

Rent-to-own retailer Brighthouse is reportedly on the brink of collapse due to a surge in customer compensation claims. Sky News revealed that the company has placed ‘Big Four’ accountancy firm Grant Thornton on standby for potential administration, which could put nearly 2,400 jobs at risk. This follows a £16m loss reported for the 12 weeks ending September 28, 2019 and an EBITDA loss of £3.2m compared to last year’s £1m. Brighthouse also set aside a £5.6m provision to cover customer claims and complaints received. The retailer stated that the volume of complaints was higher than anticipated, leading to a £5.6m increase in affordability claim provisions. In October 2017, it was announced that Brighthouse would pay £14.8m in compensation to 250,000 customers due to irresponsible dealings by the Financial Conduct Authority.

Factuality Level: 9
Factuality Justification: The article provides accurate and objective information about Brighthouse’s financial situation, including its reported losses, potential administration, job risks, and customer compensation claims. It also includes relevant historical context such as the £14.8m compensation payment in 2017.
Noise Level: 3
Noise Justification: The article provides relevant information about Brighthouse’s financial situation and customer compensation claims, but it could benefit from more in-depth analysis of long-term trends or possibilities, as well as evidence to support its claims.
Financial Relevance: Yes
Financial Markets Impacted: Brighthouse and related financial markets
Financial Rating Justification: The article discusses a retailer on the brink of collapse, reporting significant losses and potential administration, which would impact its financial performance and potentially affect related financial markets. It also mentions customer compensation claims and previous fines from regulatory authorities.
Presence Of Extreme Event: b
Nature Of Extreme Event: Financial Crash or Crisis
Impact Rating Of The Extreme Event: Severe
Extreme Rating Justification: The retailer reported a £16m loss, increased customer compensation claims and had to take out a £5.6m provision for affordability claims, putting 2400 jobs at risk.

Reported publicly: www.retailsector.co.uk