Is it game over for LK Bennett as it plans administration filing?
today Mar 1, 2019
LK Bennett is preparing to call in administrators as it continues to seek a last minute funding lifeline from new investors. The upscale footwear and apparel chain has been seeking an investor or buyers in recent weeks but no deal has been forthcoming and an administration filing could happen in the next few days.
That would put around 500 jobs at risk at the company and would come only around 18 months after founder Linda Bennett regained control of the company having earlier sold her majority stake.
Accountancy firm EY has reportedly been lined up to handle the administration process, Sky News claimed.
If the filing happens, it would make the business one of the highest-profile casualties of the current weak UK fashion retail environment.
Bennet had originally sold her business over a decade ago to Phoenix Equity Partners in a deal valuing it at £100 million. But she came back as a consultant in 2017 before buying back full control.
It has gone through several tough years with its latest set of available results (for the year that ended in mid-2017) showing an operating loss of almost £6 million.
The potential failure of the business not only underlines the tough UK backdrop but also how the weakness is affecting all price levels from the mass-market, where New Look has been struggling, up to the premium sector that LK Bennett occupies (a pair of its high-heeled pumps is almost £200 and a silk tea dress close to £300).
But analysts suggested that pricing is part of the problem for the business. Catherine Shuttleworth, CEO at shopper marketing agency Savvy, said: “Pricing at LK Bennett has really rocketed [and] it has left many of its shoppers behind. Combined with expensive store estates and a shopper who is spending more and more time online, it seems like the numbers aren’t stacking up. There will be interested parties in the brand I’m sure - probably including Mike Ashley - but it needs some reinvention to woo its core shopper back.”
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