Fashion chain Select falls into administration
Fashion chain Select has fallen into administration, putting 1,800 jobs at risk at its 169 stores across the UK. The firm, which targets women aged 18-45, has been struggling despite having struck a deal in April last year that cut rents at its stores.
Select’s administrators said stores would continue to trade while all options for the business were assessed.
A host of High Street retailers have run into trouble recently as spending patterns change.
Select is owned by Turkish entrepreneur Cafer Mahiroğlu, who himself bought it out of administration in 2008.
Last year, the retailer – which has annual sales of £77m – used a process called a company voluntary arrangement (CVA) to negotiate rent cuts of up to 75% from its landlords.
However, business advisory firm Quantuma, which has been appointed as administrators to Select, said ‘prevailing High Street conditions’ meant the turnaround plan the chain had tried had not succeeded.
“We will continue to trade Select whilst we assess all options available to the business, with the aim of achieving the optimum outcome for all stakeholders,” said Andrew Andronikou, joint administrator at Quantuma.
“Options include a sale of the business, in addition to entering into discussions with those parties who have already expressed interest in acquiring the business.”
Maureen Hinton, global retail research director at market research firm GlobalData, said the chain was in “a difficult place in the market, competing directly with very strong brands such as BooHoo and Primark, as well as the supermarkets”.
“It’s not a big destination retailer and it’s simply not selling enough. There’s already over-supply in the market for the demand,” she added.
“When you’re competing on such low prices then the margins are very tight.”
Select’s administration is just the latest piece of bad news for the UK’s High Streets, which have suffered as consumers increasingly do their shopping online.
Several high-profile names have fallen into administration or used a CVA process, which can be used to close stores and allow for rents to be renegotiated at outlets that remain open. On Thursday, creditors at struggling department store chain Debenhams backed a CVA plan that will see the closure of 50 stores and rent reductions at other outlets.
Last year, House of Fraser fell into administration before being bought by Mike Ashley’s Sports Direct. In March, fashion chain LK Bennett called in administrators. The chain was bought last month, but 15 of its 36 stores were closed.
Sir Philip Green’s Arcadia Group, which owns Topshop and Dorothy Perkins among others, is also reportedly seeking a CVA.