The struggling UK high street took another blow this week, with a clutch of administrations beckoning as other businesses reviewed their UK approach.
Retailers’ cash flows were hit by rent quarter day, which fell on Monday June 24, as the tough UK economy continued to bite.
Both indies and large multiples were hit, with value fashion chain Internaçionale filing an intention to appoint administrators on Tuesday.
The 150-store chain is understood to have lined up Ernst & Young as administrator. Industry sources said part of the business may be preserved through a pre-pack deal, but warned as many as 40 stores could shut.
Nick Hood, business risk analyst at financial research firm Company Watch, said the financials for Internaçionale looked weak, with sales “trending down for quite a while”.
He said: “The problems of trying to sell the summer collection in the cold weather was a real issue for them, but the finger on the trigger of the executioner’s rifle was rent quarter day.”
Further retailers also hit the buffers as rent quarter day left vulnerable businesses with little available cash.
Young fashion mini-chain Ark has lined up insolvency firm Begbies Traynor – which was called in to deal with York indie Coggles – as its administrator.
The 14-store business is believed to have struggled in the past year to 18 months, with one source saying: “It’s a tragedy because it’s gone from a small store in Leeds to a larger chain.”
Premium indie Fenton Walsh in Peckham, south London, also closed after eight years of trading, blaming the economic environment and wet summers for its demise.
The store, opened in 2005 by Maria Fenton and Claire Walsh, posted a note on its door which blamed “four years of an unstable economic climate, three years of badly planned and managed road works, two years of cold, wet summers and one unsympathetic government which doesn’t support the lifeblood of the high street: small independent shops.”
One source told Drapers: “Rent quarter day, business rates and the weather have destroyed this season – this is why there will be further casualties.”
International firms were not immune to the British economy’s woes, with Danish brand house Bestseller planning an overhaul of its UK retail business.
Bestseller’s UK and Ireland manager Allan Nielsen said he had conducted a review of all stores and was now closing its loss-making shops. He noted the UK market was “very tough”.
Bestseller is set to close around five of its multi-brand stores including its Oxford Street unit, but it will open 15 to 20 new stores in the medium term.