Administrations: The biggest UK fashion retailers to collapse in 2019
Retailers of all disciplines have come under fierce pressure from rising costs and online competitors over the past year, increasing the recent turmoil facing UK high streets.
Over the eleven months to the end of November, 81 UK retailers fell into administration, according to data from KPMG.
This represents a decrease on the same period in 2018, but experts at the corporate finance giant said this has been driven the increased use of restructuring methods, such as CVAs, as pressures continue to weigh down heavily on retail firms.
Alongside a number of high-profile collapses, some retailers also announced major store closure programmes resulting in thousands of job losses in the industry.
Here, we look at some of the key fashion retailers, which have gone bust or entered administration in 2019:
The department store chain entered administration in April as it sought to reduce its debt and start a major restructuring process, which would result in store closures. This followed on-going efforts by retail tycoon Mike Ashley of Frasers Group (then Sports Direct) to wrest control of the business. It was eventually placed into administration and bought in a pre-pack deal by a consortium of its investors (called Celine). In May it secured approval for a CVA to enable it to close 22 stores in short order with a further 30 slated for closure thereafter, as well as to secure rent cuts on 100 further stores. Ashley, who had previously owned 30% of Debenhams, called the administration a "national outrage" and sought to challenge the CVA. Its lenders have subsequently pumped more cash into the business. Just before Christmas it caused alarm by seeking further rent cuts.
– LK Bennett
The fashion retailer was bought from administration in a rescue deal in April, by its Chinese franchisee Rebecca Feng using the vehicle Byland UK, but said it would close 10 stores with the loss of 110 jobs after a downturn in performance. Its founder Linda Bennett had previously returned to the firm and injected significant amounts of her own cash to save it but had been unable to turn it around before administrators from EY were appointed.
The young fashion retailer fell into administration in May, after an initial CVA, launched last year, had failed due to a deterioration of trading towards the end of last year. In June it secured the backing of creditors for a second CVA process, which secured the employment of Select’s 1,800 staff and preserves the operation of its 169 stores, centralised head office and warehouse facilities, administrator Quantuma said.
– Jack Wills
Jack Wills collapsed into administration in August having previously been put up for sale by its private equity owner Bluegem. It had experienced cashflow issues due to tough trading and an ambitious retail and wholesale expansion. A bidding war ensued between Mike Ashley's Sports Direct and retail tycoon Philip Day of Edinburgh Woollen Mill, before Ashley emerged victorious, paying £12.75m for the 100-store chain. Shortly after the acquisition Sports Direct (now Frasers Group) announced eight store closures.
– Karen Millen
All Karen Millen and Coast’s 32 UK stores and its 177 retail concessions were closed in September after it slid into administration, although its online brand was saved by Boohoo, which bought it for £18.2m. The move marked Boohoo's first move into premium fashion and the brands were relaunched in October.
– Links of London
The jewellery retailer is in the midst of an administration after a tumultuous spell under the ownership of Greek business Folli Follie, leaving its 35 stores and 350 jobs at risk. Vulture fund Hilco and Frasers Group's Mike Ashley were linked to the retailer as it sought a buyer in September but no deal was forthcoming.
Retail tycoon Philip Day, using his investment vehicle Spectre, took the troubled value fashion retailer private after investors agreed to sell him their stakes in July. However by October the chain had fallen into administration before a rescue deal was agreed with Peacocks, which is part of Day's Edinburgh Woollen Mill Group. The closure of 30 under-performing stores was immediately announced with 285 continuing to trade.
In November, Mothercare, which had been trading under a CVA, appointed administrators to its UK business and announced the closure of all of its 79 stores. Its CEO Mark Newton-Jones subsequently said the brand had suffered from a misperception from consumers that it had already collapsed before it had and it struggled to generate sufficient sales and cash to enact a turnaround. Soon after it announced it had secured a deal with Boots to sell its range of clothing in its stores from next year. The international arm of Mothercare was unaffected by the move.
– Mamas & Papas
Just days after rival Mothercare went bust, Mamas & Papas tumbled into administration and announced the closure of six high street stores. The maternity and baby retailer was bought back in a pre-pack deal by private equity house Bluegem, which also owned Jack Wills before its collapse. Bluegem had better success with upscale department store Liberty this year, which it sold to a private equity-led consortium for £300m in July.
Other closures and restructures
Meanwhile, there has also been a raft of retailers forced into shutting shops and announcing major redundancies to cope with the changing retail landscape.
High street stalwart Marks & Spencer is in the midst of plans to close 100 stores to cut costs while Arcadia owner Sir Philip Green secured backing (at the second time of asking) for a CVA from creditors, which will allow him to close 23 stores and secure rent cuts on dozens more. A further 25 were to be closed by a separate restructuring process.