Young fashion retailer Blue Inc is planning to close 60 to 65 of its 232 UK shops, resulting in 500 job losses.
The retailer said the move will allow the company to focus on profitable stores as well as its online and international business.
Chief executive Steven Cohen told Drapers: ”After a pretty milld winter coupled with the shift towards online, it has become clear that we have too many shops. Although it was a tough decision and we don’t want to lose 500 jobs we had to be proactive to protect the rest of the staff and the business. We need to focus on the online side of Blue Inc.”
A significant proportion of the stores planned for closure will be Officers’ Club fascias, a firm Blue Inc acquired in 2011, which are located across the UK.
Blue Inc will dispose of the leases by restructuring a subsidiary, A.Levy, possibly by putting it into administration. A.Levy owns many of Blue Inc’s properties while the retailer’s name and brands are owned by a seperate subsidiary within the business.
Cohen stressed that it was not a pre-pack administration.
Blue Inc has appointed audit and property adviser Capa to agree terms with landlords, Cohen added that this was at a “very early stage”.
Like-for-like sales at Blue Inc increased by 3%, while online sales increased by 52% in the four weeks to January 3. However the retailer discounted heavily throughout the period, selling all stock for £20 or less.
Blue Inc has 232 UK stores and four shops in Estonia, Latvia and Lithuania. It is planning to open more in Russia and the Middle East.