Superdry was being tipped as a potential buyer for streetwear brand Fenchurch as Drapers went to press, after Fenchurch fell into administration blaming delivery delays and rising cotton prices and labour costs.
Fenchurch managing director John Cockburn said it had suffered cash flow difficulties because of delays at its suppliers in China, which in turn delayed deliveries to retailers.
Fenchurch’s administration strengthens the argument for moving manufacturing closer to home or to the UK (see facing page), especially for short-order brands.
Cockburn added that Fenchurch had increased its order volumes with manufacturers, but the associated cost savings had not been enough to offset “increased cotton prices, more aggressive pricing from China and labour shortages in textiles in general” and that the brand’s margins had been hit.
The business was continuing to trade on Wednesday while administrator RSM Tenon sought a buyer. Some 34 employees have been retained at Fenchurch but between 15 and 20 positions have been made redundant.
RSM Tenon said there had been “a lot of interest” in the company from trade and venture capitalist buyers but would not disclose names.
Industry sources said streetwear giant SuperGroup could buy the Fenchurch name, and that sportswear retailer Sports Direct was also likely to be interested.
RSM Tenon’s senior manager of corporate recovery David Taylor said he was looking for a buyer that would enable the business to continue trading. The closing date for offers is March 11.
Julian Dunkerton, chief executive of streetwear giant SuperGroup, declined to comment and no one from Sports Direct was available.
Fenchurch has delivered some of its spring 11 stock to its 100 doors and will continue to do so.