Thursday 7 March 2019 3:42 pm

LK Bennett collapses into administration


Reporter covering retail and property. Email stories to seb.mccarthy@cityam.com

Reporter covering retail and property. Email stories to seb.mccarthy@cityam.com

Follow Sebastian McCarthy
Upmarket women’s footwear retailer LK Bennett has collapsed into administration, in the latest sign of industry trouble on the high street. 

Some 500 jobs across 39 stores are now at risk at the high end firm, which has appointed accountancy firm EY as administrators.

In a statement this afternoon, EY said: "A sale process for the business has commenced. Trading will continue as normal, although web sales will be temporarily suspended, to allow the administrators to work with the company’s trading partners, to ensure customer orders can be processed and delivered as usual."

The brand, which has been favoured by the Duchess of Cambridge and has become well-known for its kitten heels, was opened almost three decades ago when Linda Bennett opened her first store.

Joint administrator Dan Hurd said: "Amidst tough trading conditions for retailers, the company has been further impacted by significant rent increases and business rate rises. Linda and the management team therefore made the difficult decision to place the company into administration, to protect the future of the business."

Hurd added: "LK Bennett is a strong luxury UK brand, the new season collection was critically acclaimed, and recent trading is up, which we hope will be attractive to prospective buyers."

The company’s international operations are not included in the administration process, it also said today.

The news comes weeks after the retailer reportedly hired advisers to conduct a strategic review, in a move that could potentially lead to the firm being sold.

Read more: LK Bennett founder weighs up future options

Martin Lane, managing editor of money.co.uk, said: "All 480 employees of LK Bennett are in for an anxious period as they wait to learn if they'll suffer the same fate as other high street retailers in the past year. With the rise of competition from online retailer offering cheap easy alternatives it’s hard for high street brand to survive.


"It is undoubtedly distressing news for employees of LK Bennett and their families especially because their fates are now being kept in limbo. Now is the time to check what redundancy rights you have and dig out any income or mortgage protection policies you hold just in case.

"Unfortunately LK Bennett is just one in a long list of high street retailers who are struggling. Anyone who works in the industry who may be worried about the future of their jobs should hope for the best but prepare for the worst."

According to Sky News, Bennett, who bought out the business in 2017, drafted in consultancy firm AlixPartners to weigh up the firm’s future option.

While a deal is not certain to take place, sources told Sky that there was a realistic prospect of Bennett selling a part of her stake in the retailer to an outside investor.

Read more: Struggling fashion chain LK Bennett files for administration

In 2008 Bennett sold a majority stake in the firm for between £80m and £100m, before buying back 45 per cent of equity that she did not already own from Phoenix Equity Partners in 2017.

Last summer it emerged that LK Bennett had made an operating loss of nearly £6m in the 12 months to July 2017, and its current efforts to review the business come amid a swathe of challenges facing Britain’s retailers.

Share


Tags: