Boohoo has today announced a £25.2million deal to buy Dorothy Perkins, Wallis and Burton as the fast fashion giant continued to carve up the remains of Sir Philip Green’s Arcadia empire with rival ASOS.
The online retailer, owned by billionaire Mahmud Kamani, said they would be buying the brands and stock but would shut all 214 physical stores, concessions or franchises with 2,450 job losses.
The deal spells another step into the mainstream for Mr Kamani’s Boohoo, which had its reputation badly damaged following revelations that its suppliers used sweatshops in Leicester to produce cheap clothing during lockdown.
And it comes weeks after Boohoo bought Debenhams and days after ASOS bought other Arcadia brands, including Topshop and Topman, out of administration a week ago.
The £25million deal for Dorothy Perkins, Wallis and Burton means that more of the biggest names on the British high street are vanishing for good during the pandemic.
Burton was founded in 1903 by Meshe Osinky, a Lithuanian Jew who fled the pogroms of his country for a new life in Britain with no money and no English, before changing his name to Montague Burton and building one of the biggest male clothing empires in the UK and Europe.
At its height Burton employed over 10,500 people in 400 stores and had the largest clothing factory in the world in Leeds, becoming a mainstay of the FTSE 100 before collapsing under the leadership of Sir Philip Green who bought it in 2002.
The fast-fashion retailer – owned by Mahmud Kamani (pictured left with Snoop Dogg, Boohoo CEO Carol Kane and his son Samir Kamani in 2018) – has now bought Dorothy Perkins, Wallis and Burton for £25m, weeks after purchasing Debenhams
The deal will see all 214 physical stores, concessions or franchises close with 2,450 job losses
Staff were emailed on Monday morning, and will be informed during the day.
Around 260 jobs, mainly head office roles, will be saved as they move with the brands to Boohoo. These include jobs in design, buying and merchandising, and the businesses’ digital wings.
Indian-born billionaire who launched fast fashion firm Boohoo from Manchester market stall and expanded online with his playboy children
Boohoo founder Mahmud Kamani, pictured right, alongside his son Umar, didn’t want to spoil his children, but helped them set up Pretty Little Thing
The Indian-born founder of fast-fashion company Boohoo grew his Manchester market stall into a £2.6billion business.
Before Boohoo shot onto the ever-growing fast fashion scene, its owner Mahmud Kamani, 55, sold handbags in traders’ stall.
He spotted the potential of internet sales and set up his online retailer in 2006 with the aim of delivering their own-branded fashion at rock bottom prices.
It since became synonymous with the wildly popular, yet equally controversial, fast-fashion phenomenon.
Its sales topped £850 million in 2019, propelling Mr Kamani to 131st place on The Sunday Times Rich List, with a family fortune of £1.16 billion.
Mr Kamani’s parents, who were originally from India, arrived in Manchester from Kenya in 1969 when his father was just two years old.
The Kamanis were forced to flee to Britain by increasing unrest and draconian employment laws that favoured native Kenyans.
Entrepreneurial Mahmud sold handbags on a market stall. He invested his money wisely in property and began a wholesale business, Pinstripe, sourcing garments from India.
By the early 2000s, the company was selling £50 million-worth a year to high street brands such as Topshop and Primark, which led to Mahmud setting up the Boohoo brand in 2006.
The company’s growth quickly skyrocketed and is now believed to be worth £2billion or more and employing 2,352 people.
Some other staff will be kept on during a months-long transition period, Deloitte said.
The deal will see the brands transfer over to online fashion giant Boohoo, whose fortunes have increased as those of its high street predecessors waned.
Chief executive John Lyttle said: ‘We are delighted to announce the acquisition of the assets associated with the online businesses of the three established brands Burton, Dorothy Perkins and Wallis.
‘Acquiring these well-known brands in British fashion out of administration ensures their heritage is sustained, while our investment aims to transform them into brands that are fit for the current market environment.
‘We have a successful track record of integrating British heritage fashion brands onto our proven multi-brand platform, and we are looking forward to bringing these brands on board.’
Boohoo chairman Mahmud Kamani added: ‘This is a great acquisition for the group as we extend our market share across a broader demographic, capitalising on growth opportunities as more and more customers shop online.
‘We continue to grow our portfolio of brands and customer base, strengthening our position as a leader in global fashion e-commerce.’
The deal marks an extraordinary few weeks for British retail where billionaires battled for some of its biggest names.
On January 25 Boohoo bought the Debenhams brand but revealed it would axe up to 12,000 jobs.
Debenhams was sold for £55million but was valued at £1.7billion when it was floated on the London Stock Exchange in 2006 and made a record £160million profit in 2013. Today its shares are worthless after recent annual losses approached £500million.
Despite Boohoo’s sweatshop scandal, revenues jumped 40 per cent to £660.8million and profits surged to £68.1million during the pandemic, Boohoo Group, which also owns the PrettyLittleThing website run by Mr Kamani’s playboy son Umar, announced earlier this month.
His son Umar tweeted about the purchase: ‘Mad that we used to go into Debenhams every Saturday looking for cheap TV’s with my dad’.
On February 1 ASOS revelled in the deal after winning a battle with rival Boohoo to grab the crown jewels of Sir Philip’s Arcadia empire after its collapse last year.
It said on Twitter: ‘The rumours are true… @Topshop & @Topman are now part of the ASOS family’.
But one Arcadia employee said minutes later: ‘Nice way to find out I’ve lost my job, ASOS, great move for the people.’ Another added: ‘Thanks for informing me I’ve lost my job, after 10 years. Very compassionate.’ And a third said: ‘It’s actually disgusting. I’ve worked for Topshop for two years and my own manager found out through Sky News as the administrators didn’t inform us.’
ASOS hopes the deal will help it grow in the US. The sale will see 300 shops shut down and 2,500 store staff lose their jobs. But it will ‘look at’ saving Topshop’s flagship Oxford Street store.
Sir Philip Green’s family will reportedly pocket £50million from the sale of Topshop – yet the shop’s 1,000 suppliers are expected to get less than 1 per cent of any cash owed to them, it has emerged. Sir Philip is still worth an estimated £930million despite the disintegration of his retail empire.
ASOS, run by Scotland’s richest man Anders Holch Povlsen, worth £6.1billion, has bought the Topshop, Topman, Miss Selfridge and HIIT brands from administrators for £265million. They also paid another £65million for current and pre-ordered stock.
Wallis will not be seen again on the British high street as Sir Philip Green’s Arcadia empire crumbled
Topshop’s sale came after an extraordinary collapse of a brand that was the biggest fashion chain on the high street just a decade ago. The brand had showstopping collaborations with designers including supermodel Kate Moss who was pictured holding hands with Sir Philip when she helped open its New York branch in 2009 – Topshop’s first in the US. Thousands camped overnight outside stores to buy Kate’s designer clothes.
In 2012 Arcadia Group was delisted from the London Stock Exchange when it was bought by Green’s Taveta Investments group for £850million.
Its success contributed to him getting a knighthood and earning the nickname: ‘King of the High Street. Now Arcadia’s crown jewels have been sold for £330million including all its clothes and accessories.
French Connection is at the centre of a high street bidding war as investment firms look to snap up the troubled retailer.
The fashion brand told investors it has received early proposals over deals after its sales plunged by more than 50 per cent in the first half of 2020.
The company – which is valued at just over £15million – has received one approach from retail investor Spotlight Brands, with backing from restructuring and investment firm Gordon Brothers.
Spotlight has backed British brands including fitness-focused Sweaty Betty, while Gordon Brothers acquired Laura Ashley last year following its administration.
French Connection – widely known by the initials FCUK – said it has also received another potential proposal from brand investment platform Go Global Retail.
French Connection (file image) has been targeted with two takeover approaches from investment specialists looking at snapping up the troubled retailer
The fashion brand (a model wearing its clothes on the runway last year) told investors it has received early proposals over deals after its shares surged by about 40 per cent on Thursday amid market speculation
Spotlight has backed British brands including fitness-focused Sweaty Betty (pictured), while Gordon Brothers acquired the Laura Ashley brand last year following its administration
The online retailer will take over stock in Topman, Miss Selfridge and HIIT brands – as well as Topshop – but not the shops.
What percentage of shops are now vacant in the regions of Britain?
- Greater London 10.7%
- South East 12.4%
- East of England 13.4%
- South West 14.1%
- Scotland 14.4%
- East Midlands 15.2%
- West Midlands 15.6%
- Yorkshire and the Humber 16.7%
- North West 16.7%
- Wales 18.7%
- North East 18.8%
Source: British Retail Consortium
Meanwhile, online fashion giant Boohoo confirmed this week that it is in exclusive talks to buy Dorothy Perkins, Wallis and Burton, other brands in Sir Philip Green’s beleaguered Arcadia empire.
Boohoo said it has also agreed a £55million deal to buy the brand and website of Debenhams – but will not take over the company’s high street shops, which look set to close.
It follows a brutal year for Britain’s highstreets with lockdowns forcing non-essential shops to close and sending already-struggling brands into administration.
French Connection – founded in 1972 by businessman Stephen Marks – has suffered from the high-street turmoil in recent years, with Covid only adding to its woes.
Sales for the first half of 2020 plunged by more than 50 per cent to £23.9million. During that same period in 2019, sales stood at £51million.
But the business – whose stores shut from March 23 to June 15 during the first lockdown – said it would survive the pandemic after restructuring specialist Hilco offered up £15million in funding.
But its online sales, which rose by 8.2 per cent, could not counteract its losses.
It said that discussions with both Spotlight and Go Global ‘remain at a very early stage’.
‘Accordingly, there can be no certainty that an offer will be made, nor as to the terms on which any offer might be made,’ the retailer said in a statement.
In December, French Connection said it had seen ‘encouraging’ sales after some stores were able to reopen, before the latest national lockdown came into force in January.
The takeover approaches come more than a year after French Connection called off plans to find a buyer following a year-long search.
A sale could also secure a payout for Mike Ashley, whose Frasers Group retail business owns an almost-25 per cent stake in French Connection.
Which stores have gone bust during the pandemic? Debenhams, Peacocks and D W Sports among the big beasts to go under amid the coronavirus crisis
- Bonmarché, the value-oriented clothing retailer, went into administration for the second time in a year on 2 December 2020.
There are 226 stores and more than 1200 employees. It is owned as a separate business by Philip Day, whose EWM is also in crisis (see below).
Philip Day put this company into administration a few months ago, and reaquired it via a pre-pack. It is thought unlikely that he will do this again a second time.
- Age UK, the charity focused on supporting the elderly, closed 133 of its 392 charity outlets in 2020 and made 400 people redundant. During the Lockdown 1 approximately 70% of its staff were on furlough.
- Debenhams, the oldest retail chain in the UK, announced on 1 December 2020 that it had no alternative except to go into lquidation.
The company has gone into administration twice in the past two years and, with the failure of Arcadia (see next item), whose concessions took up a large proportion of Debenhams’ sales area, the Company’s future looks very bleak. It is expected that all stores will trade until Christmas, after which the contents of every store will all be sold off, its staff made redundant and the premises vacated or transferred to new owners if other companies acquire some or all of the estate.
The Debenhams’ name goes back to 1778, when William Clark established a drapery store at 44 Wigmore Street. It became Clark and Debenham in 1813, when Wm Debenham invested in the firm. The first store outside London was opened in Cheltenham in 1818. It became Debenham & Freebody in 1851.
In 1919 it took over Marshall & Snelgrove, another department store chain, and bought Harvey Nicholas in 1920. In 1985 it was acquired by the Burton Group (later renamed Arcadia), was de-merged in 1998, acquired by private-equity consortium Baroness Retail in 2003 and become a public company again in 2006. Private equity funds in the form of TPG, CVC Capital and Merrill Lynch paid themselves £1.2bn in dividends as a reward for owning the business for only three years and increasing its debt from £100m to £1,000m.
A sale and lease-back of 23 stores raised almost £495m for the temporary owners and saddled the business with long-term leases of up to 35 years.
In the past 35 years it has had a variety of owners none of which was fundamentally committed to the future of Debenhams Group or was able to introduce a coherent long-term strategy. Debenhams has not been the only retail victim this year of this approach.
- Arcadia, the fashion giant owned by Philip Green’s wife in Monaco, went into adminstration on the last day of November 2020. It consists of the former Burton Group, with major subsidiaries Topshop, Dorothy Perkins, Burtons, Miss Selfridge, Wallis and Evans.
These are all well-known brands. The administrators are allowing the stores and the website to continue to trade while new purchasers for the business(es) are found. There are around 440 stores and perhaps 12,000+ staff.
The heyday of Philip Green’s Arcadia was probably 2004-2007, but it failed to invest sufficiently in shops, IT or modern designs. Its dinner has been eated by upstarts like Primark, BooHoo, Zara, Next and even by grocery clothing lines.
For some years, the company has lacked a clear sense of direction and suffered from low investment and an unwillingness to develop its online sales. It has cut its store numbers by more than half since 2012. Comparatively staid business like John Lewis and Next have heavily invested in their online operations and now produce half their sales online.
So this could have worked for Arcadia, if it had been attempted. Large amounts have been taken out of the business in the form of dividend payments.
More public interest has been generated by the Greens’ luxury cruisers than by any innovation in Arcadia’s shops. There is anxiety about whether the pension assets of the Arcadia Group are sufficient to pay pensions for its past and current employees.
Administration means that debts owed by Arcadia to landlords and suppliers will probably be repaid at perhaps only 1%-2% of what is owed. Apart from the effect of the Arcadia crash on its own shops and employees, its failure will be a hammer blow for many suppliers and property owners.
It has already caused JD Sports to pull of out its acquisition discussions with the Debenhams Department Store chain, because so much of Debenhams’ floor space is given over to Arcadia concessions many of which may not survive after Christmas. An offer by Mike Ashley of a lifeline to keep Arcadia as a going concern was rejected.
Arcadia would probably have been in trouble at some time in 2021-22, but the impact of the coronavirus pandemic and the closure of non-essential stores in Lockdown 1.0 and Lockdown 2.0 have become a death sentence for this group of businesses, giving it no chance to recover or adopt more successful strategies.
- Peacocks and Jaeger, both clothing businesses owned by EWM, were put into administration in mid-November after negotiations with possible suitors came to nothing.
Discussions on behalf of both companies continue. Jaeger’s business is more formal: it has around 76 stores and concessions employing 347 staff. Peacocks approach is more at the value end of the market: it has 423 stores and more than 4,200 staff. Both companies have gone through administration before.
Both suffer from the decline in spending on clothing, the switch to online purchases by shoppers, the two lockdowns and threatened additional lockdowns in 2021, which make the future of fashion chains hard to gauge.
- Edinburgh Woollen Mill and Ponden Mill, both part of Edinburgh Woollen Mill Group (EWM Group), have gone into administration on 6 November with the initial closure of 56 EWM stores and 8 Ponden Mill shops.
Eight hundred and sixty-six staff are to be made redundant. EWM Group has been given another fortnight to determine the future of the Group, but it is likely that there will be further store closures and redundancies. Meanwhile the search for buyers for the EWM chains, inlcuding EWM, Peacocks, Ponden Mill, Jaeger and other brands continues.
EWM Group subsidiaries operate more than 1,000 stores and have 21,000 employees. The firm is a (previously) well-established company that bought a number of brands such as Jaeger, Austin Reed and Jane Norman from administrators.
It is owned by Philip Day. He owns Bonmarché separately from EWM Group, although their stores have also put up ‘closing down sale’ notices in store windows.
It was hit very hard by the coronavirus lockdown, needing to pay rent on almost one thousand properties with zero income.
So far the company has only reopened a little more than about one-half of its outlets after Lockdown I and they are all closed again following Lockdown II. Its orientation towards an older market, tourists, and market-town Mill-type general products attractive to people on shopping trips has been severely hit in 2020 (and possiby into 2021 as well). The store numbers figures quoted here are on the high side and rather dated, but EWM Group has 384 Edinburgh Woollen Mill stores and other shops trading as Peacocks (479), Bonmarché (220), Ponden Mill (65), James Pringle (and other names) (88 stores) and 27 stores combining several EWM fascias.
It is almost certain that a proportion will close. Apart from its sheer scale, the importance of Edinburgh Woollen Mill has been that in the last few years Philip Day has been the only entrepreneur actively buying distressed retailers apart from Mike Ashley’s Sports Direct (now Frasers Group).
- J Crew, American ‘preppy’ clothing retailer, is to close all six of its UK stores making their staff redundant. Its parent company has recently emerged from administration and seems to have decided to liquidate its UK subsidiary.
- Celine Group Holdings, the parent company of Debenhams, has called in FRP Advisory to prepare for its own administration.
This is understood to have been done to prevent any creditor taking action against them in the period when Debs is up for sale and trying to find a new owner.
It is said that interest is overdue on £200m of loans made to Celine: administration would mean there would be no need to pay it. Any administration of Celine would not affect Debenhams store operation per se.
- M&Co, the Scots-based value clothing retailer previously called Mackays, has gone into administrators and been bought by its previous owners as part of a pre-pack to save the business. There are 262 stores and 2,700 employees.
The covid-19 lockdown cost the firm more than £50m: in its last financial year profits fell by 40% to £3.6m. Forty-seven stores are to close (380 redundancies) as part of its recovery plan. The company was established in 1961.
- D W Sports, a sportswear and gym retailer owned by Dave Whelan, went into administration in the first days of August.
The company’s outlets – as non-essential retailers – have been closed since lockdown started: its 73 gyms were about to re-open until the change in government policy that postponed the resumption of trading by gymnasia, bowling alleys etc.
There are 75 DW Sports retail stores: these will all close in four weeks. The Group has a total of 1,700 employees. Twenty-five stores have closed already.
The Fitness First Group which is also owned by Dave Whelan is not to go into administration: its 43 clubs will remain trading.
- Feather & Black, the award-winning bed specialist rescued in 2017 from administration, has been bought by Dreams.
None of its stores is to reopen after the easing of lockdown. It will become online only, probably with concessions in Dreams.
Outstanding orders will be honoured. The Company was rumoured last February to be up for sale, so these closures are not strictly caused by coronavirus, although being closed for three months would not have helped its chances of survival.
- Grosvenor Shopping Centre in Chester went into receivership along with its car park earlier in July 2020. It was originally built in the 1960s and refurbished in the 80s. There are 101 retail units, all on one level. The Shopping centre continues trading.
- Oliver Sweeney Trading, the retail arm of the prestige shoe company Oliver Sweeney Group, was placed in administration in mid-July.
All its seven stores are closed as the company sees its retail future as online only. This administration does not affect the wholesaling and online arms of the business.
- Muji, the Japanese high-street homewares retailer, has applied for bankruptcy protection in the U.S. It has debts of $64m and the Covi-19 lockdowns in the UK and the U.S. have hit it hard.
It won’t be included in our UK figures, but, under U.S. law the corporation will be required to produce an exit plan to revamp the company. This may well have implications for UK stores. The stores continue to trade.
- Cardinal, the Yorkshire-based firm of shopfitters (outfitting or remodelling store interiors), went into administration in mid-July.
One hundred and thirty-five staff amongst its 170 employees have already been made redundant. Their business has been hit by the pandemic.
In addition their customers (ie the retailers) were unable to make firm commitments about work they needed in 2020, H2, into 2021.
The impact of covid-19 upon retailers has meant that most companies are now unsure about the number, type and location of stores that they are going to need in 2021-2025. The collapse of work for Cardinal is a symptom of the bloodbath on the high street.
- Soletrader, a footwear retailer established in 1962, went into a creditors’ voluntary liquidation in mid-July 2020. Its assets including stock and brand names Sole and Soletrader were purchased by its owner, the Twinmar Group, and are now invested in a new subsidiary, Twinmar London.
Most of the company’s stores opened for trading in July, but eight shops have been closed. Soletrader’s website is a separate entity and is unaffected by the liquidation.
- Peter Jones (China), a 50-year old crockery and gift business based in Wakefield, went into administration in mid-July. It had not opened after the lockdown eased. There were ten stores and 76 staff. The business is expected to be liquidated.
- Norville Group, a Gloucestershire-based firm of opticians and optical suppliers to the industry, went into administration early in June after selling its nine Norville Opticians’ practices the previous week.
Since then the former Norville laboratories, which were renowned for being able to produce lens to the very highest standard, have been acquired from administration by Inspecs, the new owener of the Norville Group, and continue to trade.
- Benson Beds, the beds and bedding business owned by Alteri, was put into pre-pack administration at the same time as Harveys (see below).
Alteri bought the business out immediately and put £25m into the company to invest in its development. There are 242 stores and 1,900 staff. Bensons (at present) is seen as a much better business than Harveys, most UK bedding is made in the UK, it faces less competition from overseas operators and Alteri is likely to focus on improving its operations, while keeping Harveys Furniture stable. The company continues to trade and existing orders will be fulfilled.
- Harveys Furniture, the second largest furniture retailer in the UK, was put into administration by its owners, Alteri Investors on the last day of June.
There are 105 stores, which have been struggling for some years, and 1,575 staff. The company is looking to close 20 stores and make 240 staff redundant. The company continues to trade and existing orders will be satisfied.
- T M Lewin, retailer of shirts and ties online and in 65 stores, went into administration on the last day of June after failing to find a buyer.
The shops have not re-opened following the relaxation of the lockdown. The busines had been acquired from Bain private equity only last month (May). The new owners, SCP Private Equity, expect to close all the stores, making the company online only. Six hundred employees are likely to lose their jobs.
- Bertram Books, the Norwich-based book wholesaler, went into administration towards the end of June 2020 with debts now (Aug 2020) known to be £25m.
Most of its 450 workforce has been made redundant. Bertrams was particularly important to smaller publishing companies.
Changes in the book market in the last 20 years including the growth of online sales and dramatic price cutting, highly-promoted ‘blockbusters’, the growth of Amazon and direct-to-customer applications as well as e-books adversely affected Bertram Books’ business model. But that is not all.
Sub-optimal decision-making by a succession of uncommitted owners have brought it down. Bertrams started in 1968 in a chicken shed in Elsie Bertram’s garden as a project for her and her son. By 1999, when it was first sold, Mrs Bertram was 86, Bertrams was the second-largest book wholesaler in the UK, and it employed 700 people.
In 2007, it was bought by the Woolworths Group and went into administration with the rest of the Company before being bought by Smiths News, the magazine/newspaper distributor of W H Smith. In 2018 it was bought by Aurelius, a German private equity group, who later sold Wordery, Bertram’s online operation, to the Waterstone’s book chain and Bertram’s library division to an Italian business.
The coronavirus pandemic, closing both libraries and bookshops, proved to be the final blow for Bertram Books. Was all this inevitable? Probably not.
- Intu Properties, the major property company that owns and manages some of the largest and best UK retail malls, went into administration on 26 June 2020. Many of its retail clients are not paying their rents and INTU’s creditors are not as forebearing.
It has total debts of £4.5bn, a merger with a European propery company came to nothing and it has failed to raise more capital. Its recent negotations with other parties, where it hoped to arrange a ‘standstill agreement’ with its lenders, led to no useful outcome, so it went into administration.
Major sites include Lakeside, Glasgow’s Braehead, Manchester’s Trafford Centre, Nottingham’s Victoria Centre and Norwich’s Chapelfield. This administration will be a major blow to the UK retail sector, although, coming after many other impossible-to-believe ‘major blows’, its significance may be less apparent.
It may not be possible for the Admiinistrators to run all the shopping centres without outside funding, although so far all sites have been kept open. It is still possible that many of their shopping centres will close unless a new potential buyer acquires some or all of them.
Some observers who have used the lockdown to re-think their personal philosophy may rejoice at the decline of this bastion of consumerism.
But the destruction of asset wealth in terms of commercial property, will adversely affect property prices, the stability of most retailers, pension funds, shares, unit trusts, tax revenue, job opportunities etc etc and bring home to the public the enormity of the slump we have managed to stumble into.
- Go Outdoors, the outdoor sports, walking, climbing, camping, riding and exercise retailer owned by JD Sports, wwnt into administration towards the end of June.
It was immediately bought out of administration by J D Sports for £56.5m (pre-pack administration), enabling hte company to be reorganised. J D Sports has stated that it wishes needs to re-think the Go Outdoors business but does not expect large-scale redundancies and closures.
There are 2,400 employees and 67 stores. Since the firm was bought by JD Sports it has lost £291m (to August 2019) and the massive losses caused by the coronavirus lockdown have only worsened the situation. In July, the Administrators estimated that unsecured creditors would receive only 1p in the £1.
- Lee Longlands, the Birmingham-based upmarket furniture retailer, went into administration towards the end of June to enable the company to restructure and improve cash flow. The company continues to trade and outstanding orders will be met.
There are six stores, mostly in the Midlands. Lee Longlands was purchased via a management buy-out in 2015. The company started in Broad Street Bham as an antiques business in 1902.
- Poundstretcher Properties, a company connected to discount-chain Poundstretcher, is to be placed into administration as part of a CVA programme by 450-store group Poundstretcher to reorganise its store portolio, cut rents and reduce other costs.
The Poundstretcher Group has argued that around 250 stores will close if the CVA is not approved by its creditors. Poundstrecher Properties holds the leases on only 23 stores and this will not affect the legal position or ownership of the group as a whole. Poundstretcher faces the same issues as the rest of the high street, compounded by the lockdown, now in its 85th day (it is really that long?).
- Oak Furnitureland, the specialist furniture store that started off on eBay, has gone into administration, and was immediately bought out of administration (pre-pack) by hedge-fund Davidson Kempner Capital Management.
There are 105 showrooms and 1,491 empoyees. The business continues still to trade, but the new owner expects to rationalise the business, probably through the closure of some stores and reductions in staff.
- French-themed retailer, bread/coffee/restaurant chain Le Pain Quotidien went into pre-pack administration in mid-June. It has been bought out of administration by a new vehicle, BrunchCo21, believed to be linked to its former owner, Cobepa. Ten of its 26 outlets have been closed with the loss of around 200 jobs in stores and the closure of its head office.
The new owners expect to negotiate T&C with the landlords of the remaining 16 properties, and the results may lead of course to further closures.
- Quiz, the Glasgow-based fashion group, put its physical stores division into administration in early June. Ninety-three head-office and warehouse redundancies have already been declared. The business wants to renegotiate rents for its 82 stores and the eventual size of the group will only be known, when this has been done. KPMG has been appointed to review the firm’s options, which are likely to include store closures. There are 915 staff in the stores division. Quiz’s online business continues unaffected, as are its 300+ concessions.
- Victoria’s Secret, the UK arm of the U.S.-owned global retailer, went into administration early in June 2020 having made a loss now known (Aug 2020) to be £100m in the last financial year. The UK fashion trade has experienced a torrid three years and the coronavirus lockdown, which prevented ‘non-essential’ stores trading (though not online), has been the final hammer blow. Victoria’s Secret has probably lost its original appeal: the aftermath of the Me-too campaign may have made the chain seem slightly tacky. There are 25 stores and 800 staff. The company sells ladies’ underwear. The company is reported as looking for a light-touch administration, allowing them to restructure the business, reduce costs and possibly find a new owner.
- Aldo, a Canadian-based international chain of stores, went into administration early in May. This has led to the UK arm going into administration at the end of May. Five UK stores have been permanently closed, leaving eight surviving while the administrators seek new owners for the UK business. The UK network is obviously up for sale, but many of the stores are franchised and are not ‘owned’ by Aldo Canada. Aldo shoes, handbags and accessories are still available for purchase in the UK both online and in its 28 UK concessions (including Selfridges, Debenhams and House of Fraser). The Irish arm of Aldo has already gone into administration. The company and its brands (chiefly ‘Aldo’ and ‘Call It Spring’) are major international businesses, operating around 3,000 stores globally served by 20,000 staff. Apart from the UK, Aldo businesses are expected to reopen as each government permits in the post-coronavirus world. The main reason the company gives for its problems is: the world-wide closures of its stores caused by governments’ attempts to limit the spread of coronavirus.
- DVF Studio, the luxury fashion company owned by Diane von Furstenberg, has gone into administration, citing ‘coronavirus’, and is closing its Mayfair store. The company has an online business as well as concessions in prestigious department stores, including Selfridges and Harvey Nichols. It announced earlier in 2020 that it was starting a subscription luxury service. The e-commerce business and concessions continue to trade.
- Antler, the luggage retailer which runs 18 stores and a concession, went into administration in mid-May. There are 194 employees: 164 of these have been made redundant. The Administrators announced in mid-July that they had successfully sold the brand name, Online business, stock and assets, but the stores remain closed and there was no news of their future.
- Johnsons’ Shoes, also trading as Bowleys Fine Shoes, went into administration in mid-May. There are 12 stores, all in the South East of England. The 145 furloughed staff will retain their jobs as the administrators seek to reopen the businesses. The group was later acquired by Newjohn Limited, part of Daniel Footwear. Six stores were closed.
- Dawson’s Music, one of the oldest stores selling musical instruments (est. 1898), went into administration early in May. There are six stores in Leeds, Manchester, Chester, Liverpool, Reading and Belfast. It is still opan and is hoping to be sold as a going concern. There are 75 staff. The coronavirus lockdown proved to be the last straw for a retail group that was already facing a decline in sales. There is also an Educational Division which supplies schools, colleges and universities. In late May, the chain was purchased by Andrew and Karen Oliver, who took over all the stores and retained the staff.
- J Crew, the U.S. fashion retailer with six UK stores, sought Chapter 11 bankruptcy protection at the beginning of May. It has 500 stores in the U.S., trades online, and owns the J Crew Factory and Madewell brands. It intends to continue trading online while it gives control of the business to its lenders who will cancel debts of $1.65bn (£1.3bn). It is unclear how this will affect its UK business.
- L K Bennet, the fashion retailer which went into administration in March 2019, is to extend its administration for another twelve months. The company expects to open seven stores on 15 June 2020 (when non-essential stores are allowed to start trading) with the remaining 10 stores to open at a later date.
- Oasis and Warehouse, two fashion retailers owned by Icelandic-Bank Kaupthing, went into administration in mid-April 2020, having failed to find a buyer for the group. All its 92 stores were closed, 2,300 staff made redundant and the 437 concessions terminated. The 13 stores and 29 concessions in the Irish Republic had already gone in into administration under Irish law: there were 248 staff in Ireland. The Oasis and Warehouse brands and e-commerce operations were bought by Hilco, which sold them in June to BooHoo, the successful e-commerce apparel business. BooHoo raised £200m in May to help it take advantage of ‘opportuunities’, and now also owns brands such as NastyGal, PrettyLittleThing, Karen Millen, MissPap and Coast. Concessions and stores in other countries will continue to trade. Oasis and Warehouse had been suffering recently from the problems common to most UK mid-range fashion businesses. The coronavirus lockdown – closing all its stores – made it impossible to continue operating and ended any chance of a sale to a business wanting the stores to continue.
- Debenhams, the UK department store group now owned by its lenders following administration in 2019, has appointed administrators once again to protect itself from its creditors. Creditors were considering using winding-up orders to get paid. Although the company has closed 22 stores this year and expected to close 28 in 2021, the new administration is likely to hasten the demise of many more of its outlets in the longer term. Although its online operations are supplying customers, all its stores are in lockdown. It has heavy debts of around £600m. The comapny is loss-making and without the sales revenue from its exisitng stores it is in deep trouble. Debenhams has closed its Irish division permanently, which has eleven stores, 958 staff and 300 concessions. Debs is also closing its Hong Kong and Bangladeshi subsidiaries.
- Spicers, the office-supplies wholesaler, employing 1,200 people started by John Spicer in 1796 ceased trading in April. It was originally part of the Spicer paper and stationery company and split in 1985. It built up a European presence, but the UK arm and the European operations were separated in 2011, Spicers being bought by Better Capital, the private equity firm controlled by John Moulton. When it went into administration its administrators were not able to sell it and the business was liquidated.
- Simply Scuba, an award-winning diving retailer based in Faversham, went into administration in June. Thirty-two jobs are at risk. SimplyScuba has won the Dive Retailer of the Year award for ten years in succession. The Simply Group also runs SimplyHike and SimplySwim. The Simply Scuba website continues to trade, with its new 500M Divers Watch on sale today for £109.
- Kath Kidston, the vintage-inspired fashion and accessories chain, appointed administrators early in April 2020. It has now announced that it will close its UK branches, concentrating on Asia, the wholesale business and online sales. The company – like many fashion retailers – has had problems in maintaining sales and profitability. Since 2018 it lost £27mn, resulting in its closing stores and cutting head-office staff. There are 200 stores globally. All 60 UK sites are to close, with only 32 of its 941 UK staff being retained. It will now operate in the UK as an online-only retailer. The company’s owners, Barings Private Equity Asia, have bought it out of administration on a pre-pack basis, having previously tried to sell it. Finances were so poor towards the end that initially Kath Kidson announced that they would only be paying part of the wages owed to employees: they have now agreed to make payments in full, but a up to a week late. The company suppliers, including HMRC and clothing manufacturers, are owned £90m by the failed company.
- Autonomy Clothing, a small fashion chain with three stores, 100 concessions and 44 staff, went into administration towards the end of March 2020. It has been beset by the same problems as the rets of the industry, the lockdown being the last straw. All employees have been made redundant.
- Lombok, the aspirational furniture and furnishings business, went into administration at the end of March. It operates both online and offline and is best known for its teak products made mostly from reclaimed timber. It has experienced two pre-pack administrations before (2009 and 2011). All 43 staff have been made redundant.
- Brighthouse, the rent-to-own household goods retailer, appointed administrators at the end of March 2020. There are 240 stores and 2,700 employees. The administration does not affect customers that rent goods, as their obligations will transfer first to the administrators and then to any new owner. This controversial business mainly deals with low-income households and was fined by the financial regulator for mis-selling and ‘unfair’ interest charged as part of consumer transactions. The compensation it must pay to 250,000 customers is understood to cost £1m per month and its most-recent financial report (February 2020) showed showed corporate losses of £16m. The company was originally called Radio Rentals whose business was renting out first radios and later TV equipment: they guaranteed to keep rented electronic goods in good repair at a time when electrical goods would often break down.
- Laura Ashley, the fashion retailer with 155 stores, went into administration in mid-March 2020. The administrators permanently closed 70 of the company’s outlets: 1,669 staff were furloughed and 677 staff continued working in the business with more redundancies announced in mid-June. Only 18 of its remaining stores have re-opened post lockdown, though this may not be ominous. Gordon Bros have been allowed to purchse the Laura Ashley brand and its archives, leaving the future of the stores, logistics and manufacturing in Britain and Ireland unresolved. The Pension Protection Fund is asking for another administrator to be appointed to ensure the protection of Laura Ashley shareholders. Laura Ashley has had problems for more than 20 years. Administration comes after a long period of poor results from a retailer that had been a star in the 80s and early 90s. The post-2016 deterioration in fashion sales affecting most clothing retailers was certainly a factor, but the failure of the business to match modern consumer requirements meant it was difficult to see the purpose of the company. Latterly it had more success with its furnishing and homeware than fashion. The conoravirus epidemic early in 2020 led to a sudden drop in footfall and store sales, which finally prompted the company’s move into administration. Gordon Brothers. a US-based restructuring corporation, bought Laura Ashley out of administration in late April.
- Kikki.K, an Australian-based retail group selling Swedish-designed stationery, has gone into voluntary administration as a result of the problems of Australian retailing plus the cost of its global expansion (now including Hong Kong, the UK, Singapore and New Zealand). There are up to five stores in the UK, three shops-within-shops in stores like Fortnum & Mason and Selfridges and an online business which, in Europe, seems now to be switched through to Australia. There are 100 stores globally. The Australian stores remain open, but the UK online business is currently uncontactable due to ‘unprecedented shipping delays’.
- Homebase, the DIY chain, has returned to profit after its experiences first as Bunnings UK and then a large CVA case. It used its CVA to cut rents and close more than 70 stores. It is therefore quitting its CVA eighteen months early. CVAs have had mixed results when used by retailers, but this is one that seems to have turned up trumps for the business.
- Soak, a major online bathroom products retailer, went into adminstration at the end of February. The market is intensely competitive and Soak’s revenue fell from £70m (2018) to £43m (2019). Its profit on the 2018 figures was only £2.9m. Price competition between online and bricks-and-mortar retailers has meant that few operators are making much of a profit, hence the decline of Soak and the collapse of other kitchen and bathroom retailers, such as Better Bathrooms. There are 220 employees.
- Bonmarché, the value-oriented clothing retailer that went into administration in October 2019, has now been purchased by Edinburgh Woollen Mills (its previous owner). It is being placed in the same operating division as Peacocks. So far only 200 stores have been acquired, leaving 70 stores in administration. A number of Bonmarché stores have ‘closing-down’ notices in their front windows and these are expected to disappear. When further information about Bonmarché is available, it will be shared here.
- T J Hughes Outlet Division has issued a notice of intended administration for its Outlet Division, prior to renegotiating their rents. Lewis’s Home Retail Limited, a subsidiary of LHR Holdings (the master company for T J Hughes), owns eight stores, two of which have already been saved via agreed rent reductions. This does not affect the whole Group, but only outlet stores. More information as it becomes available.
- HonestJohn.co.uk, the online advice website for car owners, went into adminstration and has been bought by Heycar, an online retailer of used cars. The staff, IP and assets have been transferred.
- Ashbury Furniture, a large furniture and soft furnishings salesroom, went into administration in February, caused by constant road engineering on the M20 (making it hard to get to the showroom) and the impact of rent and rates.
- Ena Shaw, a producer and retailer of soft furnishings based in St Helens, went into administration in February 2020, closing its factory and store. There were 167 employees.
- Oddbins, the wine and drinks off-licence business of European Food Brokers, went into administration at the beginning of February. There are 56 stores, mostly trading as Oddbins or Wine Cellars: two have now closed. Employees number around 567. Less than one year ago 45 EFB off-licence businesses were sold or closed on the basis that they were no longer viable.
- Hearing and Mobility, a spcialist national chain of hearing and mobility stores, has ceased trading and administrators have been appointed. Hearing and Mobility (HHML) is a Northampton-based company founded in 2002 with 18,000 customers. It established a chain of 27 hearing and mobility stores throughout Britain, later focusing mainly on the Midlands and the South with 15 stores. Starting in 2016, the company closed many of its mobility stores to concentrate on hearing disabilities. The company rarely made a profit and by January 2020 had only four stores. After its stores had ‘temporarily’ ceased trading they were sold to two other companies trading in this vertical market. Amplify Hearing has acquired HHML hearing operations, assets and 76 staff, enabling customers to continue being provided with service.
- Hawkins Bazaar, a Norwich-based toy/games retailer with a focus on adult merchandise, went into administration in the latter days of January. There are 20 stores and 177 staff. The company went into administration previously in 2011. Weak trading in 2019 and a poor Christmas have led the firm’s current problems. The stores will remain open while a buyer is found, but by mid-February were all to close.
- Houseology, a Glasgow-based ecommerce furniture business, has gone into administration after a doleful Christmas. Twenty-three staff have been made redundant. Bureau, its office-oriented associate business, contiues to trade and is not affected by Houseology’s failure. Houseology was set up in 2010 and is perhaps best-known for being backed by famous names such as Terry Leahy, Mike Welch and Bill Dobbie. By the end of February Houseology’s assets including IP had been acquired by competitor Olivia, part of the Moot Group. Moot Group started in 2018 and is targeting turnover of £20m by end-2020.
- Beales, a 22-store department store chain, went into into administration, having failed to find a new owner or additional finance in the latter end of 2019. At first, the company’s stores remained open in the hope that a new owner could be found. They have all now closed. The loss-making stores in the Midlands and the South were closed suddenly when no new owner cold be found, and were followed a fortnight later by the remaining stores, which were mostly in East Anglia. The company had announced in December 2019 that it was in difficulties and needed refinancing. Beales was originally set up in 1881 in Bournemouth as the Fancy Fair and Oriental House, taking advantage of the then-current craze for Chinese-themed merchandise. Originally a strong independent department store, Beales had been buying other department stores for 25 years in order to gain scale. It bought Bentalls in 2002 and in the last eleven years has grown by acquisition through taking over small groups of ex-Co-op and small independent department stores, which were not in great shape when they were acquired. These stores were generally in smaller towns like Bedford, Keighley, Mansfield, Peterborough, Skegness, Yeovil, Spalding, Diss, Beccles and Wisbech . Losses rose from -£1.3m in 2018 to -£3.1m in 2019 and poor trading over Christmas made it essential to secure new funding. Beales employed more than 1,200 staff. Colliers International reported in January 2020 that Beales was paying £2.85m in business rates, £1m more than should have been the case.
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