L.K.Bennett is preparing a voluntarily bankruptcy filing, in what could be the latest name in fashion to crumble under the pressures of Covid-19 as new U.K. lockdown measures through at least Dec. 2 threaten sales yet again.
This would mark the second bout of insolvency in 24 months for the 30-year-old British label, which collapsed into administration in March of last year and was acquired a month later by the U.K. arm of its Chinese franchise partner, Byland UK.
The maker of classic kitten heels and other upscale women’s wares, which aims to bring “a bit of Bond Street luxury to the High Street,” is said to be opting for a company voluntary arrangement, or CVA, akin to a pre-packaged Chapter 11 bankruptcy in the U.S. A CVA means it has secured support from most of its creditors and landlords, affording it a measure of control over the restructuring process.
L.K.Bennett plans to close as many as five stores and pay rent for the remaining 69 brick and mortars and concessions based on sales. It wasn’t immediately clear how many of the company’s roughly 400 employees would lose their jobs, though the 300 store-based staff are likely to be at the greatest risk.
The brand’s stores haven’t seen a significant sales recovery since reopening after initial coronavirus shutdowns earlier this year. The best-performing locations drive the bulk of their business through tourists, who have largely disappeared amid the global pandemic.
The administration filing comes after a rash of British apparel firms from Debenhams to Edinburgh Woollen Mill to DW Sports have all fallen on hard financial times.