Store Twenty One on the brink as key lender the State Bank of India backs away

 
Helen Cahill
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A handful of retailers have already gone into administration this year (Source: Getty)

Budget clothing retailer Store Twenty One is close to collapse after a key backer has refused to keep funding the business.

The fashion chain is likely to fall into administration this week, the Sunday Telegraph reported. Around 1,000 jobs are at risk across Store Twenty One's 125 outlets. It is thought that Alix Partners will handle the administration.

Read more: Trouble in store: More pain on the way for UK retail

The business has been trying to raise money from its lender, the State Bank of India, but the bank will not provide any further funding. It is reportedly owed around £14m from Store Twenty One.

HM Revenue and Customs handed Store Twenty One a winding-up notice this month after the retailer failed to keep to the terms of the company voluntary agreement it arranged with creditors last year.

Store Twenty One will become the latest in a string of high-profile collapses in the retail sector. In April, middle-market fashion retailer Jaeger fell into administration, putting nearly 700 jobs at risk, after Jaeger's directors were unable to find a buyer for the business. Brantano footwear entered into administration the month before.

Experts have predicted more casualties on the high street in the year ahead as tax hikes, rising labour costs and a squeeze on consumer spending continue to challenge the retail industry.

Store Twenty One did not respond to a request for comment.

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