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  • Insolvency review - Week 9

     

    RCM Weekly review - March 2019 - Week 9

     

     This week: LK Bennett lines up administrators, retailer GAP announce that they are closing 230 stores globally and UK car output slumps 18 percent in January.

    1 st March 2019

     LK Bennett Shop

    LK Bennett lines up administrators as it struggles to find backer.

    It is reported that EY (Ernst & Young) will oversee the insolvency if no new investment can be found in the next few days.   Around 500 jobs would be at risk at the company.

    The retailer reported an operating loss of nearly £6m in the year to the end of July 2017, the most recent results available for the firm.

    Catherine Shuttleworth, chief executive 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.”

    https://www.bbc.co.uk/news/business-47413269

    1st March 2019

     GAP Facia

    Fashion retailer GAP announce that they are closing 230 stores globally.

    Fashion retailer GAP has announced that they are closing 230 stores and splitting off its Old Navy brand, a restructuring they state is aimed at "revitalising" the brand, and generate a higher percentage of its sales online, which it hopes will reach 40% of total revenues.  The company has said that the closures would mainly be in North America leaving 742 GAP stores globally.  GAP have 152 stores in Europe, the majority of which were in the UK.  It was not revealed how many jobs will be lost or where the closures will occur over.

    https://www.retailgazette.co.uk/blog/2019/03/gap-will-close-230-stores-revitalise-company/

    Comment: The High Street continues to slim down.

    This week GAP and LK Bennett are the latest victims of the declining High Street, with consumers increasingly choosing the convenience of purchasing online over the high street.  Retailers need to adjust their bricks and mortar portfolio accordingly and/or come up with alternative methods to enhance the high street experience for their customers.  Businesses that can be dynamic in this area stand the best chance of survival, however those that fail to act, ultimately will not survive.

    28th February 2019

     UK car output slumps

    UK car output slumps 18 percent in January.

    The number of cars manufactured in the UK fell in January for the eighth month in a row.

    The Society of Motor Manufacturers and Traders (SMMT) have said that production fell by 18.2% in January, with output for destined for export was down by 21.4%.  Exports bound for China were down by 72% while for the EU it was 20% lower.  Mike Hawes of SMMT commented: "The industry faces myriad challenges, from falling demand in key markets, to escalating global trade tensions and the need to stay at the forefront of future technology."

    https://uk.reuters.com/article/uk-britain-economy-autos/uk-car-output-slumps-18-percent-in-january-idUKKCN1QH00G

     

    If you have concerns about your personal finances or is your business is struggling? Concerns about whether your retail business is reacting to changing consumer demands. We can offer a free confidential consultation.

    You can call our confidential advice line free of charge:

    0800 288 4088.

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