MANY creditors of the former Beales department store chain are likely to receive less than two pence for each pound they are owed, administrators have said.

Bournemouth-based Beales went into administration in January 2020, triggering clearance sales which were ended by the first Covid lockdown.

More than 1,000 jobs were lost when the business and its 23 stores folded.

The company – founded 139 years earlier by John Elmes Beale – owed £12.6million in loans and had a multi-million pound pension deficit.

Unsecured creditors, who include a long list of fashion and beauty brands as well as trade suppliers, were owed an estimated £17.6m.

A report by joint administrators Will Wright and Chris Pole, of Interpath, said: “Based on current estimates, we anticipate that unsecured creditors should receive a dividend.

“However, the timing and amount of any dividend are dependent upon the overall creditor claims.

“Due to the large quantum of liabilities and restricted sums available, any dividend is estimated to be less than 2p in the pound.”

The business’s secured creditors are the finance company Wells Fargo and the company’s own pension scheme.

The administrators’ update says: “We anticipate that secured creditors will suffer a significant shortfall.”

Preferential creditors – including employees owed wages, holiday pay and pension benefits – are due around £232,753 and should be paid in full.

Closing down sales at Beales were so busy that the administrators had to hire agency staff to cope with the trade. The sales brought in £15.5m towards paying creditors before they were brought to an end by Covid.

Most of the chain’s remaining stock was later sold for £1.6m as administrators gave up hope of reopening any stores during the coronavirus crisis.

The Beales name and intellectual property were as sold for £5,000 to New Start 2020, which reopened the Beales store Poole’s Dolphin Centre and later its branches in Peterborough and Southport. Its chief executive is Tony Brown, who ran the old Beales and took control of it in a management buyout in 2018.

In their recent update, covering the period January to July this year, the joint administrators say a series of tribunal claims from former staff have been settled.

The administration is currently due to end on January 19 next year.