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Administrations, liquidations and debt: UK fashion financial woes of 2023
This year has been one of the more rocky periods for businesses in the UK, with the cost-of-living crisis continuing to wreak havoc on retail and consumer buying power as a whole. The impact has been apparent through a succession of vacant units on British high streets and in city centres, and even in the typically resistant e-commerce landscape, which also hasn’t been able to sidestep the turbulent market.
In this round up, FashionUnited provides an overview of some of the brands, retailers, and other fashion companies that have fallen victim to 2023, and where they stand now.
M&Co
Scottish retail chain M&Co fell into administration in late December 2022 and was only later scooped up in a rescue deal covering its intellectual property and brand by AK Retail in February of this year. Ultimately, the retail group opted to shutter all of M&Co’s 170 stores in April, resulting in its staff of nearly 2,000 being made redundant. However, soon after there were reports of plans for an e-commerce relaunch. A new site was unveiled in June, selling AK Retail-owned brands Yours Clothing, Long Tall Sally and Pixie Girl.
Lavish Alice
Back in February, it was revealed that the wholesale arm of Manchester-based womenswear brand Lavish Alice had fallen into administration, forcing the brand to move solely online. The subsidiary, ‘Fast Fashion Collections International Limited’, had “grappled” with supply chain issues that resulted in financial challenges for the firm, leading it to be sold in a pre-pack deal to founding directors Matthew Newton and Lee Bloor, after it reportedly owed creditors four million pounds. Lavish Alice as a brand now operates as a standalone e-commerce entity in a direct-to-consumer model.
Prévu Studio
London-based menswear brand Prévu Studio found itself in administration in March, months after it was snapped up by Mike Ashley’s Frasers Group in an acquisition sweep of JD Sports’ portfolio. While the founder of the brand, Jake Hall, went on to launch his own eponymous label, Drapers reported in April that Frasers was believed to be a frontrunner in the bid to buy back Prévu from administration. Kroll Advisory was appointed as the administrator. There currently hasn’t been an update on the situation, however Prévu Studio’s e-commerce site is not operating, with a note stating ‘be back soon’ on the homepage.
Cath Kidston
Having fallen into administration earlier in 2023 for the second time in two years, womenswear retailer Cath Kidston was once again rescued in a deal with Next. The high street giant said it had agreed to acquire the brand name, domain names and intellectual property of CK Acquisitions Ltd for 8.5 million pounds, with the brand’s e-commerce site to be licenced back to administrators for up to 12 weeks to ensure stock clearance. It was understood by the Guardian at the time that around 125 jobs were at risk, as administrators looked to sell remaining stock prior to closing Cath Kidston’s four UK stores – the last of which shuttered in June.
Internet Fusion Group
The owner of Webtogs, Surfdome and Country Attire, Internet Fusion Group (IFG), was forced into administration in April after shareholder debts were reported to have risen to 20 million pounds, and the group failed to find an interested party willing to take on the business as a trading entity. In May, it was BrandAlley that stepped in to rescue IFG’s intellectual property assets, logistics operations and customer service division. At the time, IFG founder Dom Scott expressed his regret about the situation, revealing that the move resulted in 100 job losses.
Scotch & Soda
In June, it was announced that Dutch fashion retailer Scotch & Soda was preparing to close all four of its UK-based stores after it had been rescued from bankruptcy by American brand management company Bluestar Alliance earlier this year. The brand filed for protection for its Dutch operations in February after being impacted by both the pandemic and high inflation. Bluestar opted to step in and snap up Scotch & Soda’s US wholesale and retail business assets in May. Notably, two of its stores in London – one on Ariel Way, the other on Carnaby Street – are still operating.
Christopher Kane
Speculation surrounding the shuttering of luxury British brand Christopher Kane ran rampant through the media in June as the company was understood to be actively seeking out a rescue plan. In July, it was then revealed that designer Christopher Kane, together with his sibling Tammy Kane, had rescued his eponymous label – as well as its sister subsidiary More Joy – from administration, which it had fallen into in a bid to avoid liquidation. Administrators FTS Recovery told WWD at the time that the firm was able to secure a sale “to the original brand founders of all trade names, trademarks and other intellectual property”. Under a separate filing on the UK’s Companies House, the company’s name had also been changed from Christopher Kane Ltd. to K Realisations 2023.
Unbound Group
Unbound Group’s own debacle first came to light in March, when it confirmed it was mulling a sale of the company after receiving a takeover bid from WoolOvers Group. After the investment fell through, the company paused its e-commerce operations and set about on a strategic review which led it to initiate a formal sales process, a move it later reversed after no potential offers had garnered full support. In July, it was then revealed that Unbound had appointed administrators for its main operating subsidiary, Beaconsfield Footwear Limited (OpCo), and suspended its AIM listing, adding that it was to continue discussions with interested parties.
Later that same month, WoolOvers stepped in to acquire OpCo, which also encompasses footwear label Hotter, which was understood to have saved 421 jobs and the brand’s retail network. Hotter’s CEO and CFO are now understood to have stepped down, while WoolOvers sets about stabilising the business. Meanwhile, at Unbound, while the company secured a 65,000 pound funding from an existing shareholder towards the end of July, it is still seeking a further cash injection and remains unlisted from AIM.
Wilkies
Family-owned fashion and homeware retailer Wilkies was another to slump into administration in June, selling six of its stores to a new company called Wilkies Trading, to which 55 employees were transferred. The Scottish retail chain was forced to close five of its stores as part of the transaction, making 30 staff redundant. In light of trading challenges and rising labour costs, among other things, the administrators had been appointed after a buyer for the business was not found.
Hunter
Popular festival footwear brand Hunter was among the more surprising companies to have been forced into administration this year, after it fell into the position in June following a period in which it had actively sought out a cash injection to keep the business afloat. Speculation surrounding a potential acquisition had been circulating until it was confirmed that Reebok-owner Authentic Brands Group was to snap up the label’s intellectual property for an undisclosed sum.
The firm further named two new licensing partnerships in the UK and US to continue designing for the brand and operating its retail and wholesale distribution in the regions. In August, it was also announced that Authentic had sold half of its equity interest in Hunter’s Greater China and Southeast Asia business to Baozun, which would see the Chinese firm oversee interests in the business via a new subsidiary, ABG Hunter LLC.
Julien MacDonald
The eponymous brand of Welsh designer Julien Macdonald fell into liquidation in July as a result of significant drops in revenue and turbulent market conditions. Liquidators for the company told WWD at the time that they were planning to sell stock and other assets in order to repay creditors, while it was also confirmed that no employees or existing contracts could be saved. Media speculation that followed alleged that suppliers and workers linked to the fashion house were also left out of pocket. Since the news broke, it has also been reported that Macdonald has applied to the high court requesting to continue trading under his name, and has also recently incorporated two new companies – JM Sparkles and Glitz and Sparkles.
Wilko
British retail chain giant Wilko was one of the more substantial hits to the high street this year. The company, which has been a staple on shopping streets for over 90 years, filed for administration in September after it failed to find funding or secure a sale of the business. In recent weeks, administrators for the retailer announced that all 400 of its stores were to close, resulting in the potential loss of 12,500 jobs throughout the region. A slew of retail giants have been circling former Wilko units for their own retail network expansion plans, including Pepco’s Poundland and Primark.
People’s Tree
The UK arm of ethical fashion brand People Tree plunged into liquidation late September, after it accumulated debts of over 8.5 million pounds in light of deteriorating trading conditions. The brand, which expanded from its homebase in Japan to the UK in 2000, is understood to have owed the group’s 14 employees a combined 243,000 pounds, leaving the status of both its UK and European businesses up in the air. In a statement to the media, co-founder James Minney said that the company was in ongoing discussions with suppliers as it attempted to turn the business around.
Thought Clothing
September seemed to be a busy month for administrations, as it was also reported that womenswear e-tailer Thought Clothing had sunk into administration. Media outlet Drapers stated that while the company would continue trading during this process, between 20 and 25 of its staff members had been made redundant. Administrators are understood to now be seeking buyers for the business and its assets, despite failing to find a buyer previously.
Strategic reviews and mounting debts
While administrations and liquidations may have defined the industry’s current market, other large-scale names in fashion were also struggling to keep up with the unstable financial crisis. This has led to an array of strategic reviews and bids to escape from mounting debt.
In The Style
After its CEO, Sam Perkins, opted to step down from his role late 2022 and was later replaced by returning founder Adam Frisby, In The Style initiated a strategic review in light of “limited liquidity” that it believed didn’t reflect its “growth potential”. Ultimately, the fast fashion e-tailer agreed to sell its operating subsidiary, In The Style Fashion Limited, for a total cash consideration of 1.2 million pounds, allowing the company as a whole to avoid falling into administration and instead work towards its target of establishing a stronger market capitalisation.
The Vampire’s Wife
Womenswear label The Vampire’s Wife found itself in a spot of bother in June after it was issued with a liquidation petition from the UK’s HMRC in regards to allegations of unpaid tax bills. The “winding-up petition” came “without prior warning” the company claimed, with it noting in a statement that it was settling the debt through financing with existing investors.
La Perla
Lingerie brand La Perla was another to come face to face with winding-up petitions that had been filed by four different creditors due to outstanding debts in the UK. In July, the Italian label was understood to have settled most of its issues through new funding, citing the reason for the debts to be down to “simple timing issues”. Problems didn’t stop here, however. In August, reports emerged of La Perla failing to pay employees, leading the Italian government to request a business plan from the firm, with unions later stating that wages would be wired by September. Despite this, just one week ago, media reports once again picked up on a lack of payment by La Perla, some stating that employees had not been paid for one month. In an email to the company, director Peter Shaefer said that funding to support these payments failed to materialise in time.
Superdry
Superdry’s own money problems led it to set about on a turnaround plan in April as dampening consumer spending began widely impacting its financials. While in May it managed to secure 12 million pounds of fresh funding generated by a sale of its shares, it later raised 25 million pounds in August to help accelerate the implementation of its turnaround plan and cost reduction programme. Despite this, the retailer swung to a loss in its recent full-year report, reporting a loss of 148.1 million pounds as revenue also dropped 18.7 percent.
