Womenswear retailer East has gone into administration for the second time in less than three years, putting 314 jobs at risk.
Geoff Rowley and Phil Armstrong, partners at business consultancy FRP Advisory, were appointed joint administrators on 29 January.
East blamed tough trading for the collapse. It has 34 stores and 15 concessions, and will continue to operate while the administrators evaluate options for the sale of all or parts of the business.
Rowley said: “Unfortunately, East is the latest high street casualty following a tough trading period at the end of last year. The retailer was making progress to expand its footprint, particularly looking at international opportunities. However, it has been unable to secure the necessary funding to realise those plans.
“We’re now working closely with all stakeholders to evaluate the options to sell all or parts of the business.”
Administrators said no redundancies had been made as of 30 January but added that they are conducting a review of the business and “exploring the options available”.
A source close to the situation told Drapers that East CEO Erica Vilkauls and the retailer’s co-founder and product director, Penny Oliver, had been trying to purchase the company through a management buy-out (MBO), but an agreement could not be reached with owner Crore Capital.
“This administration could have been avoided if the MBO had been successful. Sales had improved in the weeks running up to Christmas but there wasn’t enough cash in the business and the investment wasn’t there to grow it,” said the source.
Like-for-like sales at East were up 6.5% in the five weeks to 25 December, compared with the same period in 2016. Last month the business outlined plans to expand in the UK and internationally, including opening new stores, revamping its online offer and upgrading its IT systems. Wholesale was relaunched for spring 18.
The most recent accounts filed at Companies House show that the retailer made an operating loss of £3.7m in the year to 26 March 2016.
East previously fell into administration in June 2015, blaming an “inconsistent” approach to design. A new company, East Lifestyle, bought parts of the business back in a £3.4m pre-pack deal. In September 2016 East Lifestyle’s sole shareholder, Fabindia, sold an 80% share in the womenswear retailer to Crore Capital.
As a result, East’s then chief executive, Suzi Spink, left the business. Two months later Vilkauls, former chief operating officer at Thomas Pink, took on the CEO role. Oliver, who founded East with Clive Pettigrew and Jonathan Keating in 1994, was product director until 2008, and returned to the role in October last year.
Vilkauls and Oliver could not be reached for comment. FRP declined to comment on speculation about an MBO.