Cath Kidston is preparing to call in administrators, putting more than 900 jobs at risk, as the vintage-inspired chain battles for survival during the coronavirus lockdown.
The business, which has 60 stores in the UK and a further 180 overseas, has filed a notice of intention to appoint administrators, a legal process which protects the business from creditors for 10 working days, as it considers potential rescue options. The group employs 941 people in the UK, 820 of whom were furloughed on 22 March under the government scheme.
Advisory firm Alvarez & Marsal (A&M) was appointed last month to help Cath Kidston seek a buyer as the British brand, which opened its first store in 1993, struggled to make a profit for its Hong Kong-based owner Baring Private Equity Asia.
Cath Kidston Group has been in difficulties for some time, recording a pretax loss of £42.3m in the year to the end of March 2018 when sales rose just 1.2% and it closed small retail businesses in France and Spain.
Coronavirus lockdowns in the UK and elsewhere have only added to the difficulties and it is understood that even if a buyer is found, the rescue is likely to involve a pre-pack administration.
A Cath Kidston spokesperson said: “The notice of intention forms part of the process by which Cath Kidston is continuing to work with A&M to explore all options for the company in the current climate.”
The group is one of many retailers battling for survival in the UK after the Covid-19 pandemic forced the closure of most stores.
Debenhams is also preparing to call in administrators after the struggling department store was forced to close all its outlets under the lockdown while Sir Phillip Green’s Arcadia Group, the owner of Topshop and Miss Selfridge, is expected to permanently close hundreds of stores as it suffers from competition from the likes of Asos, Boohoo and Primark.
The lockdown has added to existing pressures on retailers from the consumer switch to online shopping and rising costs from business rates coupled with the fall in the value of the pound since the 2016 Brexit vote.
Fashion brands have been hit particularly hard as young people switch from spending on outfits to alternatives such as digital subscriptions and mobile phones while competition from online businesses remains intense.
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