Boohoo has today bought the Debenhams brand for £55million and will axe up to 12,000 jobs by making it an online-only operation – but its ambition to be the Amazon of fast-fashion received a blow as rival ASOS raced ahead in the battle to purchase Topshop.
The retailer’s bosses said the deal will not include saving any of Debenhams’ 124 stores which will close for good as part of a structured winding down of the business – spelling the end of the brand on the high street after 242 years.
Debenhams has been 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.
Its purchase spells another step into the mainstream for fast-fashion giant Boohoo, owned by Mahmud Kamani, which had its reputation badly damaged following revelations that its suppliers used sweatshops in Leicester to produce cheap clothing during lockdown.
Despite the 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.
Mr Kamani said today: ‘Our acquisition of the Debenhams brand is strategically significant as it represents a huge step which accelerates our ambition to be a leader, not just in fashion eCommerce, but in new categories including beauty, sport and homeware.’
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’.
There is also a new battle of the British billionaires as three of the country’s richest businessmen also went into battle for the remainder of Sir Philip Green’s Arcadia retail empire after it collapsed last year.
Mr Kamani, worth £1billion, is fighting with online rival ASOS, run by Scotland’s richest man Anders Holch Povlsen, worth £6.1billion, for the purchase of the Topshop, Topman and Miss Selfridge brands in what would be one of the biggest shake-ups of the British retail landscape in decades. The Blackburn-born billionaire brothers Zuber and Mohsin Issa, who made their £3.56billion from petrol stations and recently bought the supermarket chain Asda, have also been locked in secret talks to buy Topshop.
But this morning Mr Povlsen’s ASOS said in a statement to shareholders: ‘ASOS plc notes recent media speculation and confirms that it is in exclusive discussions with the Administrators of Arcadia over the acquisition of the Topshop, Topman, Miss Selfridge and HIIT’. But a spokesman said a deal is not inevitable.
Some experts have suggested the £55million price tag for Debenhams is too high – and questioned whether the department store’s concessions including Clinique and Lancome will want to be associated with Boohoo after the sweatshop scandal.
Clive Black, retail analyst at Shore Capital, said the Debenhams deal – and the battle with Asos and the Issa brothers for the Arcadia brands – represented ‘a volcano erupting’ on British high streets. He said: ‘We are seeing a massive reshaping of Britain’s high streets all at once. The future of the high street is now up for grabs’. On Debenhams’ concessions he added: ‘It remains to be seen how they will mind being associated with a business connected to those kinds of labour processes’.
The fast-fashion retailer – owned by Mahmud Kamani (pictured left with Snoop Dogg, Boohoo CEO Carol Kane and his son Samir Kamani in 2018) – was thrust into the spotlight this year following accusations that its suppliers used sweatshop-style conditions in Leicester to produce cheap clothing during the Covid-19 pandemic. The business has now bought Debenhams
Mr Kamani, worth £1billion, is also fighting with online rival ASOS, run by Scotland’s richest man Anders Holch Povlsen, left with with Anne and worth £6.1billion and Zuber and Mohsin Issa, who made their £3.56billion from petrol stations, to buy Topshop. ASOS appears to be in pole position, entering exclusive talks this morning but with no guarantee of a deal, the company said
These are the billionaires all vying to grab Topshop from the ashes of Sir Philip Green’s Arcadia empire
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.
PLT was founded by Mr Kamani’s sons Adam and Umar in 2012 following the enormous success of their father’s business and reported a turnover of £374million in 2018.
By 2022, the company is forecast to be worth around £2.1billion. The Boohoo Group bought a 34 per cent stake in PLT for £269.8 million in May.
Tatler named PLT co-founder Umar its eighth most eligible bachelor for 2019, alongside the Duke of Roxburghe and former One Direction star Harry Styles.
His lifestyle is decidedly jet-set, with his contacts book brimming with A-list stars such as Jennifer Lopez, rapper P Diddy and actor Denzel Washington. His lifestyle is decidedly jet-set, with his contacts book brimming with A-list stars such as Jennifer Lopez, rapper P Diddy and actor Denzel Washington.
Such is his self-belief that when he wanted to launch PLT in the US three years ago, he offered a six-figure sum to reality TV star Kylie Jenner, half-sister of Kim Kardashian, to appear in one of his £15 orange dresses.
Umar Kamani founder of PrettyLittleThing.com in Paris
In a big hint that Boohoo intends to take on the might of Amazon, the business said it would create the UK’s largest marketplace across fashion, beauty, sport and homeware – expanding the range of products sold via Debenhams marketplace by maintaining current third party relationships and expanding further.
Boohoo has previously bought a number of well-known high street brands out of administration, turning them into online-only operations, including Oasis, Coast and Karen Millen.
Greg Lawless, retail analyst at Shore Capital, said: ‘The big question in beauty is whether the big beauty brands – Clinique and Chanel – will remain with Boohoo longer term.
‘The Debenhams number one position in premium beauty was predicated on counter sales, which will not form part of this acquisition.’
It came as a judge in the Insolvency and Companies court made an order winding up Debenhams.
Judge Daniel Schaeffer made the order at a hearing on Monday after describing the company as a ‘rudderless ship’ and said the official receiver should assess the position.
The purchase of the Debenhams brand by Boohoo ends more than two centuries on the British high street.
The brand started a liquidation process last month after failing to secure a last-minute rescue sale with JD Sports, putting 12,000 jobs at risk.
Asos has had a good year after customers flocked to the trendy website via their mobile phones, leading to sales rising by 24pc to £1.36bn in the four months to December 31. In the UK, sales were up 36pc to £554.1m.
The company expects more of the same in 2021 and has ramped up profit expectations for the year ahead.
Many in the City had expected Asos to take a hit during lockdown and over the festive season as Christmas is traditionally when young women buy cocktail dresses and strappy heels.
Instead, the company nimbly changed its stock to focus on pyjamas and T-shirts, which have been in hot demand as customers are forced to stay at home.
In 2019 profits at Asos plunged by nearly 70% amid IT chaos at its overseas warehouses – but lockdown appears to have turned around their fortunes.
Today’s deal will see Debenhams products sold by Boohoo later this year, allowing enough time for liquidators to continue closing the retailer’s sites once they are allowed to reopen after Covid-19 lockdown restrictions are lifted.
But with stores closing across the 242-year-old brand, it is unlikely many of the remaining 12,000 jobs are likely to be saved.
Andy Brian, partner and head of retail at law firm Gordons: ‘Boohoo’s reported acquisition of the Debenhams brand and the news that ASOS appears to be a leading contender for Topshop bears out what I said last year – that brand acquisition by online retailers was always going to be the most likely outcome for many of the struggling high street fashion retailers.
‘For too long the likes of Arcadia and Debenhams have been waiting for their customer to come to them, while other players such as Asos, Boohoo and Missguided have followed the customer where they want to go. The trend towards online shopping started years ago but it has accelerated in the last 12 months due to the pandemic.
‘Ultimately, the cost of significant investment in updating back end systems and processes to drive efficiency and profitability was always going to be a barrier to keeping stores running. It’s sad news for store workers, and for those shoppers who (in normal times) prefer that option, but the harsh reality is that both businesses simply haven’t been able to attract as many of the latter as they needed.’
Simon Underwood, business recovery partner at accountancy firm, Menzies LLP, said: ‘Debenhams has been left with no place to turn and nothing worth selling except intangible assets.
‘The shift to ecommerce was happening well before the pandemic, but has accelerated significantly over the past year. It now seems unlikely that the High Street as we knew it will re-open any time soon, or ever. With plans in place for Debenhams to re-emerge in 2022, as an online-only retail brand, there can be no doubt where future trading opportunities lie.’
Debenhams had already announced significant job losses and the permanent closure of six stores, including its flagship outlet on London’s Oxford Street.
Boohoo said the deal represents a ‘fantastic opportunity’ to target new customers and launch into the beauty, sports and homewares market for the first time.
The company highlighted how Debenhams has six million beauty shoppers and 1.4 million Beauty Club members.
It said: ‘The group intends to rebuild and relaunch the Debenhams platform, helping further the group’s stated ambition to lead the fashion eCommerce market, and grow into new categories including beauty, sport and homeware.’
ASOS tycoon who made £6.1billion fast fashion fortune lost three of his four children in the 2018 Sri Lanka bombings
Povlsen, 46, and Anne Storm Pedersen, pictured together, met when Anne began working in sales for Bestseller
Anders Holch Povlsen is the fabulously wealthy owner of the international fashion business Bestseller and the biggest shareholder in the British online fashion company ASOS.
He has the taste in fast cars and private jets you might expect from a man estimated to be worth £6.1 billion.
It is all a long way from the tiny Danish town of Brande, with a population of just 7,000, where Povlsen’s father, Troels, opened the family’s first clothes store in 1975.
Other outlets soon followed. And Anders was only 27 when Troels made him the sole owner of Bestseller.
By 2007, it was so successful that supermodel Gisele Bundchen was hired to promote it.
Partial to a single malt and locally brewed real ale, he is known to visit local pubs in Scotland but rarely says much about himself.
Bestseller employs 15,000 people and boasts nearly 6,000 shops. He owns brands such as Jack & Jones and Vero Moda, and 27 per cent of ASOS.com, Britain’s biggest internet fashion retailer.
There was tragedy in 2018 when three of his four children were killed in the Easter Sunday bombings in Sri Lanka. Alfred, Alma and Agnes all died.
Debenhams’ own fashion brands will also be absorbed into Boohoo’s current portfolio and sold via the Debenhams website.
Boohoo chief executive John Lyttle said: ‘The acquisition of the Debenhams brand is an important development for the group, as we seek to capture incremental growth opportunities arising from the accelerating shift to online retail.’
Debenhams’ administrator, FRP Advisory, has been continuing to talk with third parties over the potential sales of all or parts of the historic retail business.
Boohoo is also understood to be in the running to purchase Topshop, Topman and Miss Selfridge after they too were placed in administration in a brutal year for Britain’s high streets.
The fast-fashion retailer – founded by Mahmud Kamani – was thrust into the spotlight this year following accusations its suppliers used sweatshop-style conditions in Leicester to produce cheap clothing during the Covid-19 pandemic.
Workers in a Leicester factory packing clothes destined for Boohoo were being paid far below the minimum wage.
Undercover reporters also found the factory operating during the city’s localised lockdown without social distancing measures in place.
The scandal caused the firm’s shares to plunge by £1.3 billion and prompted a wave of condemnation from politicians and members of the public.
But the company appears to have bounced back as wide-spread lockdown rules saw non-essential shops shut and shoppers rush to buy online.
Experts have predicted that ASOS will win the race for Topshop.
Chloe Collins, Senior Apparel Analyst at GlobalData, a leading data and analytics company, said: ‘ASOS would by far be the most complementary new owner for Topshop, Topman and Miss Selfridge. The brands are already popular sellers through its third-party platform, proving that there is strong customer overlap, and ASOS’ impressive global reach would help the Arcadia brands target new shoppers. Though ASOS would not take on any stores, and it is unclear whether it would keep the brands’ websites or simply use exclusivity to boost its own platform, the retailer’s digital prowess will aid the brands in gaining top of mind appeal, as they have so far fell behind online competition.
‘The fact that ASOS is willing to buy three of Arcadia’s brands should also give it an edge, as other interest has centred around the Topshop brand only’.
Debenhams became one of the largest high street casualties at the end of last year after rescue talks with JD Sport fell through.
The chain had been in administration since April, but when any hopes of a rescue were dashed, it drew a line under 242 years of trading.
Blackburn-born brothers who started out cleaning toilets have built £3.5bn petrol station business
They were brought up in a terraced house after their father came to Britain to work in the textiles industry.
Four decades on, Mohsin and Zuber Issa’s journey from the back streets of Blackburn to the top of the property ladder appears complete.
The self-made billionaires, who own Euro Garages, Europe’s biggest independent forecourt firm, have recently bought a £25million Knightsbridge mansion.
Their woollen mill worker father Vali and mother Zubeda were living at a two-up, two-down terraced house on Balaclava Street in Blackburn when Mohsin and Zuber were born in the early 1970s.
Euro Garages has a partnership with a several household name brands, including Spar, Greggs, Burger King, Subway and Starbucks.
It was founded by brothers, Zuber Issa and Mohsin Issa in 2001 with a single petrol filling station in Bury, Greater Manchester.
Just 15 years ago they were working in a petrol station in Halifax, doing the stock-taking and cleaning the toilets among other things.
They took a lease on a local garage with their combined savings of £5,000 and today they control a business with an estimated value of some £3.56billion.
It followed a bruising year for the high street which saw Sir Philip Green’s Arcadia group also collapse.
Arcadia, which owns Topshop, Miss Selfridge, Dorothy Perkins and Burton, tipped into administration, putting 13,000 jobs at risk.
Arcadia’s concessions, including Topshop and Dorothy Perkins, were worth £75million-a-year in sales to Debenhams.
The collapse set off a domino effect, with JD Sports pulling out of talks to buy Debenhams.
Experts called the collapse of the two giants at the end of last year one of the most ‘devastating’ weeks in the history of British retail.
Up to 25,000 workers were put at risk of redundancy in the space of 12 hours.
The number of job losses was so large it equated to losing the entire labour force of the UK fishing industry overnight.
It came in addition to thousands of other job losses as a result of the pandemic, which has pushed businesses across all sectors to breaking point.
Peacocks and Jaeger, which are owned by the Edinburgh Woolen Mill Group, fell into administration last month, putting 21,000 jobs at risk.
Laura Ashley went bust in March while fashion giants Oasis and Warehouse fell into administration in April.
The stationery chain, which usually makes 40 per cent of its annual sales over November and December, was particularly hit by lockdown measures over the festive period.
Approximately 1,500 jobs and 173 stores are on the line for the retailer, who appointed accountancy firm PwC to handle the administration process.
It was announced at the start of December that all Debenhams stores were to close for good after last-ditch attempts to save the retailer failed.
It was today revealed that Asos has emerged as the frontrunner to buy Topshop, Topman and Miss Selfridge after they were placed in administration.
The online fashion retailer is keen to acquire the brands from the administrators of Sir Philip Green’s Arcadia Group – which also owns Dorothy Perkins and Burton.
Asos is competing against rivals including Boohoo Group, U.S. retailer Authentic Brands Group, which is working with JD Sports Fashion Plc, and Chinese fashion group Shein, Sky News reported.
Boohoo has already dumped 64 suppliers as it battles for reputation after Leicester lockdown sweatshop scandal
Sir Brian Leveson, famed for his inquiry into the press eight years ago, published his first report on Boohoo’s supply chain overhaul a fortnight ago.
Last year Boohoo was exposed for sweat shop style conditions and low pay at the Leicester factories it uses.
Following the revelations retired judge Leveson was hired in November to oversee Boohoo’s so-called ‘Agenda for Change’ with accountants KPMG tasked with independently tracking its progress.
As part of the agenda the company has been reviewing its UK supply chain across the UK and internationally to replace bad actors with alternative ethical suppliers.
So far Boohoo has removed 64 suppliers from its UK roster.
Mahmud Kamani, the executive chairman who was singled out for criticism in a previous report after giving evidence while taking breakfast on a luxury hotel balcony, said he was ‘immensely proud’ of the speed of change at the company and added: ‘The team has worked to effect change during such a challenging period for the group, and it’s encouraging to see our progress acknowledged in the report.’
However the company only wants to acquire the brands and not the stores – therefore casting speculation that a deal could put jobs at risk.
The company is currently in the lead to buy the Topshop brand for more than £250million, according to Sky.
The billionaire brothers Zuber and Mohsin Issa, who recently bought the supermarket chain Asda, have also been locked in secret talks to buy Topshop.
On Thursday, Retailer Next Plc said it had pulled out of the bidding for Topshop and Topman after it was unable to meet the price expectations of the collapsed fashion chains.
Administrators at Deloitte, who were drafted in to find bidders for the businesses following a slump in sales, are expected to sell the brands by next month.
Last year the Arcadia Group, which runs 444 stores in the UK and 22 overseas, was hammered by store closures amid the pandemic.
The administrators said they would ‘asses all options available’ but would continue to honour all online orders and operate all of its current sales channels.
Online fashion giant Asos has confirmed it is in exclusive talks with administrators for Sir Philip Green’s Arcadia retail empire.
The company said the ongoing discussions are about snapping up Arcadia’s brands including Topshop, Topman, Miss Selfridge and HIIT, sold via Burtons.
Asos said in a short statement to the London Stock Exchange: ‘The board believes this would represent a compelling opportunity to acquire strong brands that resonate well with its customer base.
‘However, at this stage, there can be no certainty of a transaction and Asos will keep shareholders updated as appropriate. Any acquisition would be funded from cash reserves.’
Asos does not have a high street presence, so any deal is unlikely to include saving the Arcadia stores, which could close for good, leaving the brands trading online only.
Mr Kamani was only four when his Gujarati father Abdullah joined an exodus of Asians from Kenya where draconian employment laws prevented them from making a living. Pictured: Mahmud Kamani with his wife, parents and high-living children
A picture from Umar Kamani’s Instagram on 18 April 2020 with the caption ‘Isolationship’ with Nada Adelle. Mr Kamani, son of Mahmud, is CEO & Founder PrettyLittleThing.com, known for his lavish lifestyle
The company’s financial success follows a newly-published report claiming Boohoo is making ‘excellent progress’ to ensure its suppliers have have suitable factory conditions. Pictured: Workers at the Faiza Fashion factory in Leicester last year
Lucy Powell MP, Labour’s Shadow Minister for Business and Consumers, said: ‘Seeing stores vanish from high streets across Britain will be a real blow to communities across our country, and it will be absolutely devastating for the 25,000 people who face losing their job.
Retail bloodbath: How the pandemic changed Britain’s High Street
The High Street has been hard hit by the coronavirus pandemic as people were told to stay inside for several national lockdowns.
High Street stalwarts such as Debenhams, WH Smith and Clarks did not escape the bloodbath.
In August 228-year-old business WH Smith said a dramatic fall in sales could force them to axe around 11 per cent of its workforce.
It was a grim announcement for an already hammered high street after hundreds of jobs were also cut at high street fashion chain M&Co.
The chain also announced the closure of 47 stores, taking the number of workers facing redundancy as a result of the Covid crisis above 100,000.
Within one week over the summer 651 roles were lost at Byron, 1,700 put at risk at DW Sports, 878 lost at Hays Travel and 1,100 put at risk at Pizza Express.
John Lewis cut a further 1,500 jobs, adding to the 1,300 axed when it permanently shut eight stores in July.
The retail giant was widely seen as a benchmark for High Street performance in the UK.
Lloyds Bank also announced their decision to make 1,070 more staff redundant on top of the 865 earlier in the pandemic.
Within the same 24 hours Marks & Spencer also reported its first loss in its 94 years as a listed company. The company had already cut 8,000 staff since March.
And Sainsbury’s also confirmed it would cut around 3,500 jobs across its Argos stores and supermarket meat, fish and deli counters, while Clarks shoes put the jobs of all 4,000 of its store staff on notice as part of its fight for survival.
‘The pandemic has accelerated changes to the way we shop, yet the government continues to disadvantage bricks and mortar businesses against online companies.
‘The support on offer for struggling businesses has been a series of sticking plasters. Unless the Government puts in place a long-term plan to help high street businesses survive this crisis and recover on the other side, we will see more well-loved high street names vanishing, and many more jobs lost.’
Retail trade union Usdaw said it would seek an urgent meeting with Arcadia’s administrators in an attempt to save jobs and ensure staff were treated fairly as Sir Philip’s retail empire went bust.
Business secretary Alok Sharma also said he would keep a ‘very close eye’ on the administrators’ report on director conduct, and pledged the Government would support the affected workers.
In a statement, Arcadia chief executive Ian Grabiner said at the time: ‘In the face of the most difficult trading conditions we have ever experienced, the obstacles we encountered were far too severe.’
He added: ‘This is an incredibly sad day for all of our colleagues as well as our suppliers and our many other stakeholders.
‘Our stores will remain open or reopen when permitted under the Government Covid-19 restrictions, our online platforms will be fully operational and supplies to all of our partners will continue.’
Meanwhile Matt Smith, joint administrator at Deloitte, said: ‘We will now work with the existing management team and broader stakeholders to assess all options available for the future of the group’s businesses.
‘It is our intention to continue to trade all of the brands and we look forward to welcoming customers back into stores when many of them are allowed to reopen.
‘We will be rapidly seeking expressions of interest and expect to identify one or more buyers to ensure the future success of the businesses.’
Earlier this month, Asos announced it would invest £90million in a new centre after annual profits quadrupled last year.
The retailer plans to open the centre in Lichfield, Staffordshire, within 12 months and will employ 2,000 people at the site over the next three years.
The 437,000 square feet, AEW and Allianz Real Estate joint venture warehouse at Fradley Park will open within 12 months and will be fully operational by 2023, Asos said in a statement.
Following its supply chain scandal last year, Mr Kamani, founder and group executive chairman of Boohoo, commissioned a report which was carried out by Alison Levitt QC.
The report found the firm had not intentionally profited from poor working conditions and low pay, and had committed no criminal offences – but it did identify ‘many failings’ and concluded Boohoo had not taken sufficient responsibility for those involved in producing its clothes.
Boohoo said 64 companies have been removed from its UK supplier list as a result.
Mr Kamani appointed Sir Brian Leveson, who chaired the public inquiry into the culture and practices of the press, to oversee Boohoo’s so-called ‘Agenda for Change’ with the accountants KPMG tasked with independently tracking its progress.
It has since published its first independent report by Sir Brian, which says Boohoo is making ‘excellent progress’ to put in pace Ms Levitt’s recommendations.
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.
- Monsoon Accessorize, the womenswear and accessories chain with 181 stores, went into administration early in June. It is a private company owned by its founder, Peter Simon: it started as a market stall.
Monsoon Accessorize was immediately bought out of administration by Peter Simon. Thirty-five stores are to be closed with 545 employees being made redundant.
The business had 181 stores and 2,534 UK staff before administration. It is understood that Monsoon does not expect that every landlord will agree to the new conditions, but hopes to save around 100 stores and 2,300 jobs. The stores are based on careful, edited retailing which only encountered problems in the last decade.
In 2019 the company survived a previous crisis through a large cash injection from its owner, the closure of 40 stores and a CVA that cut rents on three-quarters of its stores.
The group’s survival after the current crisis will also depend upon how readily shoppers will return to physical stores post-coronavirus and by how much their tastes and buyer behaviour will have changed in this new environment. Monsoon’s international business is unaffected, with 49 stores and 966 staff outside the UK.
- 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.
Source: Centre for Retail Research
The rise and fall of Debenhams: From modest female outfitters to star-studded fashion launches with Kim Kardashian and Gemma Atkinson… how 242-year-old retail chain met its demise in 2020
Debenhams has been a mainstay on UK high streets for 242 years, but is now set to shut its doors for good.
In 1778 William Clark opened a drapers store on 44 Wigmore Street in central London, selling expensive fabrics, bonnets, gloves and parasols.
The business had a modest start in life, with Mr Clark continuing to run the single store until meeting a potential investor.
William Debenham formed a partnership with the store owner in 1813, pumping funds into the business which then became Clark & Debenham.
Five years later it opened its first store outside the capital, in Cheltenham, and started to dramatically expand.
The business became Clark & Debenham, after William Clark opened a drapers store in 1778 on 44 Wigmore Street in London. Mr Clark had initially opened the shop selling expensive fabrics, bonnets, gloves and parasols, before it was renamed
Shoppers are seen charging through the doors of a Debenhams department store on the first day of the sales in 1977
Penny Lancaster models Ultimo lingerie at Debenhams on Oxford Street in October 2002 (left), while Kim Kardashian launches her ‘True Reflection’ fragrance range at a Debenhams store in London ten years later in May 2012
Shoppers browse for bargains at a Debenhams department store at the start of its sale on December 27, 1977
When Clement Freebody invested in the firm in 1851 it was renamed Debenham & Freebody, and continued to grow by snapping up smaller rivals and expanding its wholesale operations.
Acquisitions continued into the next century and in 1905 Debenhams Ltd was formed.
After the First World War ended, the retailer merged with Marshall & Snellgrove, and in 1920 purchased Knightsbridge retailer Harvey Nichols.
Seven years later the Debenham family exited the business as it was listed on the London Stock exchange.
By 1950, Debenhams was the largest department store group in the UK, owning 84 companies and 110 stores.
In 1985 Debenhams merged to become part of Burton Group, which soon rebranded as Arcadia, before splitting away 13 years later after a period of rapid store expansion and the launch of its first international franchise sites.
William Debenham (above) formed a partnership with drapers store owner William Clark in 1813, pumping funds into the business which then became Clark & Debenham. Five years later it opened its first store outside the capital, in Cheltenham
Bargain hunters burst into Debenhams department store at 9am on December 27, 1977 for the start of the winter sales
Following demerger from the Burton Group, Debenhams was listed on the London Stock Exchange until 2003, when it was acquired by Baroness Retail.
Baroness, backed by private equity firms CVC Capital Partners and Texas Pacific Group, started to strip the company’s assets, including a £450 million sale and leaseback of 26 properties and internal cost-cutting.
Three years later, Baroness almost tripled its value as it was floated on the stock market, but the retail group was now weighed down by a portfolio hamstrung with expensive rental agreements.
Nevertheless, Debenhams continued to grow, acquiring nine stores from Roches in the Republic of Ireland in 2007 and Magasin du Nord, the leading department store chain in Denmark, two years after.
The company also had a partnerships with Michelle Mone’s Ultimo bra company in the 2000s, which led to a series of photoshoots with glamour models inside its stores.
In 2014, after a decline in company profits, retail tycoon Mike Ashley bought 4.6 per cent of the company’s shares.
A Debenhams store in Manchester is pictured in 1981. In 1985 Debenhams merged to become part of Burton Group, which soon rebranded as Arcadia, before splitting away 13 years later
The Debenhams store at Luton in Bedfordshire is pictured in July 1987
He steadily increased his ownership of the department store business, expanding it to 29.7 per cent by 2018.
However, the business had now felt the full effect of difficult high street conditions and sky-high rents, resulting in a £491 million pre-tax loss in 2018.
By April of 2019, the retail giant entered administration and delisted from the stock market.
It undertook a major restructuring, designed to restore it to its former glory, but now appears likely to disappear for good after Christmas, after entering liquidation.
Now, Debenhams is to start a liquidation process after JD Sports confirmed it had pulled out of a possible rescue deal, putting 12,000 workers at risk.
The 242-year-old department store chain said its administrators have ‘regretfully’ decided to start winding down operations while continuing to seek offers ‘for all or parts of the business’.
Michelle Mone opens the Ultimo lingerie brand’s first concession at Debenhams in Liverpool in 2015
A Debenhams fashion campaign in 2010 featuring Shannon Murray who had been using a wheelchair since her teens
A person walks past a boarded up Debenhams on Oxford Street on April 16 during the first coronavirus lockdown of the year
It is understood that the collapse of rescue talks were partly linked to the administration of Arcadia Group, which is the biggest operator of concessions in Debenhams stores.
Debenhams said it will continue to trade through its 124 UK stores and online to clear its current and contracted stocks.
‘On conclusion of this process, if no alternative offers have been received, the UK operations will close,’ the company said in statement.
Debenhams has already axed 6,500 jobs across its operation due to heavy cost-cutting after it entered administration for the second time in 12 months.
Arcadia tumbled into insolvency on Monday evening, casting a shadow over its own 13,000 workers and 444 stores.