The bad news for shops continued as it was revealed that one chain has been forced to enter into administration, whilst another big name store is teetering on the brink.
D2 Jeans has been confirmed as calling in the insolvency experts, whilst underwear retailer La Senza has filed a notice of intention to enter into administration.
La Senza is one of the most well known underwear chain stores in the UK and has 146 branches with 18 concessions, employing around 2,600 staff.
However, the firm has blamed ‘trading conditions’ for its decline as well as the ‘overall macro environment’ and has registered a formal notice of intent to appoint insolvency practitioners. According to the Insolvency Act, this means administrators could be officially called in within the next 10 days.
But the underwear chain is not prepared to go down without a fight and has pointed out that it is not yet actually in administration.
In a statement for the firm, a spokeswoman said that ‘for the avoidance of doubt….no administrator has been appointed.’ She also said that the company was continuing to explore all avenues to try and ‘safeguard’ not just the company’s future, but also the careers of its many employees.
La Senza is currently working with high end accountancy firm KPMG, to try and find a solution to its monetary problems which avoids the stores being closed. At present, every outlet is continuing to operate with no redundancies or closures mooted so far.
The chain was originally owned by Dragon’s Den whizz, Theo Paphitis, but was sold five years ago to Lion Capital, a private equity group. Mr Paphitis said the news of the company’s decline was ‘sad’ but ‘a sign of the times.’
Unfortunately, D2 Jeans’ misfortunes are slightly more advanced as they have now formally appointed administrators to sort out the firm’s finances.
In the first post-Christmas collapse seen in the retailing sector, D2 Jeans have fallen into such a state they have been unable to continue trading in all of their outlets.
BDO are the insolvency experts which have been called in to deal with the administration of the Ayrshire-based business and they have already closed 19 branches and made 200 employees redundant.
The website for the group is no longer fully functional either but the remaining 28 shops in the chain are continuing to trade, in the hope that jobs can be rescued by a successful bid.
BDO are currently seeking a buyer for either all or part of the business and have said they will attempt to continue to keep the doors open whilst any bids are considered.
The administrators have said that the ‘extremely difficult trading conditions,’ as well as the ‘economic climate,’ which have been the downfall for many retailers, were factors in the decline of D2 Jeans. However, BDO said they were ‘hopeful’ that the business can be saved from total collapse.
The debt-stricken retailer operates right across the UK, with stores in Northern Ireland, Wales, Scotland as well as England. It was originally set up by Sir Tom Hunter, an entrepreneur from north of the border, but has had financial difficulties before.
Two years ago, D2 Jeans were in administration, but were partially saved by a buyout from the management team, rescuing approximately 500 staff in 40 outlets from compulsory redundancy. However, not all branches were included in the new look group and over 300 staff in 32 stores lost their jobs.
D2 and La Senza are the first wave of retailers to admit that the Christmas trade has not been sufficient to save their skins and experts are predicting there could be a number of other casualties which could be doing the same before January is over.