Distressed situations are back in the U.K. retail sector in a big way.
Struggling retailers across the pond are showing just how bad their financial balance sheets are, either collapsing into administration before the holiday selling season is even over or hiring advisors for a last ditch effort to forestall what may be an inevitable collapse.
Rising costs and inflation’s impact on consumer spending have been key factors weighed on a number of retailers across the U.K.
U.K. labels that have struggled include lifestyle brand Joules, which earlier this month secured a rescue deal from company founder Tom Joules and Next Plc and Scottish budget fashion chain M&Co, currently in insolvency proceedings since Dec. 8. Since collapsing into administration, M&Co has laid off staff at its head office in Scotland, and more layoffs could be forthcoming. There is the possibility now that its estimated 175 stores in the U.K. might need to shutter. Administrators put the chain up for sale, but it appears that potential buyers are looking elsewhere and the auction deadline passed last week. In contrast, value fashion chain Matalan attracted four bidders, including one from former board chair John Hargreaves and another from the retailer’s senior lendors. A decision on the new owner isn’t expected until after the start of 2023, however.
British e-tailer Atterley collapses into administration
Atterley.com, operating as a marketplace for fashion designers, revelaed plans to appoint an administrator.
A report in Drapers, which first broke the news on Thursday, said Atterley has stopped taking new orders. It wasn’t immediately known whether there will be layoffs in connection with the bankruptcy.
The collapse represents the second tour of bankruptcy for the women’s fashion e-tailer. The company’s former parent Maison Seven Ltd. was placed into administration in January 2016. Formerly known as Atterley Road, the company was founded by Edward David and Katie Starmer-Smith in 2011, and launched the following year. The first bankruptcy was reportedly due to the inability of its management team at Maison Seven to raise new funding to support operations.
The e-tail platform was relaunched after the Welch Group acquired the assets out of bankruptcy. Welch Group chairman and majority owner Mike Welch reportedly was eyeing new funding in 2018 to expand international operations.
According to Crunchbase, Atterley closed on a raise of 539,000 pounds ($719,511 at average exchange for the year 2018) through crowdfunding, and listed U.K. venture capital firm Crowdcube as the sole investor.
High street retailer Wilco has a new CEO
British homeware and household goods chain Wilco has named Mark Jackson, a restructuring expert, as its CEO designate.
Formerly the CEO at Bensons for Beds, Jackson takes over from Jerome Saint-Marc, effectively immediately.
The retailer warned earlier this year that there was a risk that it could run out of cash by yearend if sales continue to slow. The company posted a loss of 36.8 million pounds for the fiscal year ended Jan. 29, 2022.
The 400-store chain has since brought in advisors to help it shore up its finances. It is in talks with lenders for a 30 million pound ($36.1 million) emergency loan to get through the holiday selling season.