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Austin Reed appoints AlixPartners

Austin Reed Group is holding discussions with turnaround consultancy AlixPartners, a year after the retailer entered into a company voluntary arrangement (CVA) and closed more than 30 underperforming stores.

Austin Reed store London

Options on the table are understood to include seeking fresh equity from a new investor, carrying out another CVA, or putting the business up for sale.

Austin Reed Group chief executive Nick Hollingworth told Drapers: “We are working with AlixPartners looking at a wide range of options for the business as any responsible director would do when trading is difficult and the retail landscape is changing considerably.”

He declined to comment on specific plans but confirmed the lease on the 35,000 sq ft Austin Reed flagship on Regent Street is up for sale after the rent jumped from £1.68m to £2.9m.

“It’s not that we don’t like the Regent Street store – we love it, but it is unsustainable.”

He added: “We have now completed our CVA and closed nearly all of the stores we identified through that, although we did deals on one or two to stay open. Now we’re doing what any other good retailers are doing which is looking at the bottom performing stores and where to open new ones.”

He said the group, which comprises classic menswear and womenswear chain Austin Reed and mainstream womenswear retailers Viyella and CC, currently trades from around 150 stores and concessions.

Austin Reed Group is owned by Darius Capital, which is controlled by property tycoon Guy Naggar. It appointed professional services firm Deloitte at the end of 2014 to work on a strategic review after it made a £1.29m loss in the year to January 31 2014. 

Around 99% of creditors approved the CVA in February last year.

Last month, sources told Drapers current trading was “OK”, but the appointment of Alix will raise questions about the health of the business. Alix was brought in to advise Jaeger following the departure of its chief executive last September, and has a reputation for helping troubled companies.

Drapers understands Austin Reed has been in talks with at least one potential buyer over recent weeks.

 

 

 

 

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