Cath Kidston has drafted in advisers Alvarez & Marsal (A&M) to undertake an urgent review of the business, including a potential sale, as it attempts to avoid becoming the latest high street casualty of the coronavirus pandemic.
A&M notified prospective bidders last week that offers are required imminently for the business.
“Cath Kidston has been actively implementing a new business strategy to support the growth of the brand while managing the many pressures in the retail sector,” a Cath Kidston spokeswoman said. “This includes dealing with the outbreak of Covid-19, which has been impacting the business globally since the beginning of the year. We have therefore initiated a process to explore options for the business, to enable the management team to continue implementing their strategy to deliver growth. This process is in its early stages and it would be inappropriate to comment further at this time”.
Cath Kidston reported a £10.5m EBITDA loss for the 52 weeks to 25 March 2018, citing “upwards pressure on costs” and “tough underlying market conditions” for its poor performance.
In September 2018, the clothing, accessories and homeware retailer, known for its floral prints, reviewed its UK store portfolio as it looked to relocate some stores to higher footfall locations.
Nigel Frith, a senior market analyst at financial consultancy Ask Traders, said: “The increasingly stricter measures implemented by the government to contain the spread of coronavirus, combined with collapsing consumer confidence, is proving to be every retailer’s worst nightmare. The sector was already in a troubled place before coronavirus struck, now the chances of survival are greatly reduced.
”Cath Kidston is just the latest in what promises to be a very extensive list of retailers that will struggle to make it through the coming three months. Time is of the essence to find a buyer otherwise the floral and polka dot designs will disappear from the high street forever.”
Drapers has contacted A&M for comment.