Footwear retailer Office has appointed restructuring advisers to assess the company’s financial position.
The Truworths-owned retailer has appointed advisory firm Alvarez & Marsal (A&M) to consider options, including a potential company voluntary arrangement (CVA). A&M is expected to finalise a restructuring plan for Office in the coming weeks. Meanwhile, professional services firm Deloitte has also been appointed to advise on its options.
Operating profit at Office slipped 41% for the 52 weeks to 1 July, as “tough trading conditions” and increased discounting hit the its bottom line. The retailer reported an operating profit of £15.3m, down from £25.9m the previous year. The prior trading period was 53 weeks.
EBITDA fell by 35% to £21m as a result of the “tough trading conditions”, and gross margin fell to 44.4% from 46% the previous year because of an “increase in markdown sales”.
At the time of the report, Office was trading from 116 stores and 40 concessions primarily in the UK, Ireland and Germany. Its concessions are with House of Fraser, Selfridges, Arcadia and Brown Thomas.
Along with many other retailers, Office suffered when House of Fraser fell into administration in August 2018. The department store owed the footwear retailer almost £700,000, which is not expected to be repaid.
Brian McCluskey retired from his role as chief executive at Office in September after 15 years with the retailer. He was replaced by Lorenzo Moretti, who was previously vice-president of global retail at consumer electronics company Sonos, in October.
A&M, Deloitte and Office have been contacted for comment.