British fashion and lifestyle retailer, Cath Kidston is reportedly in a race to seek a new buyer to prevent it becoming the next UK retail casualty amid the Coronavirus outbreak.
According to Sky News, Cath Kidston has hired advisers from Alvarez & Marsal to undertake an urgent review of its strategic options.
Last week, prospective bidders had also been reportedly asked that offers were required imminently for the brand.
In 2014, Baring Private Equity Asia became a substantial shareholder in Cath Kidston before it took full control in 2016.
With the Coronavirus epidemic impacting a large number of British retailers, the brand is becoming increasingly concerned about its financial state, with fears increasing that administration may be a foreseeable outcome for the company if a new buyer is not found soon.
In the last two years, Cath Kidston has lost more than £27 million.
Sky News reported that it recorded an additional loss of £11 million before interest, tax, depreciation and amortisation in the nine months to December, according to information sent to potential bidders.
Although, it is reported that Chief Executive, Melinda Paraie’s turnaround strategy for Cath Kidston had shown positive results before the Coronavirus outbreak. This includes cutting operating costs through a 40% reduction of head office staff and closing under-performing stores as well as boosting online sales through its new e-commerce platform.
A spokesman told Sky News: “Cath Kidston has been actively implementing a new business strategy to support the growth of the brand while managing the many pressures in the retail sector.”
“This includes dealing with the outbreak of COVID-19, which has been impacting the business globally since the beginning of the year.
“We have therefore initiated a process to explore options for the business, to enable the management team to continue implementing their strategy to deliver growth.”
Laura Ashley is believed to be the first victim of the COVID-19 crisis in UK retail, after it filed for administration last week putting up to 2,700 jobs at risk.