Wed, 27 Apr 2016 | ADMINISTRATION
Although upmarket tailor and suit retailer Austin Reed has fallen into administration, there are hopes that the brand has enough value to keep the business trading as a going concern one way or another.
The news of its administration appointment comes just days after fellow high street retailer BHS suffered a similar fate, leaving 11,000 jobs in jeopardy. Austin Reed cites cash flow problems due to “challenging retail market conditions” as the main cause.
The suit retailing brand has been a permanent fixture on the high street for 116 years and once counted Sir Winston Churchill and Elizabeth Taylor among its prestigious clients. However, the firm has appointed AlixPartners as administrator while options to keep the business alive are explored.
The upmarket tailor will continue trading while AlixPartners seek out potential buyers for the iconic high street brand. The options include selling off all or parts of the business to keep it afloat.
Peter Saville, a joint administrator at AlixPartners, said: “Our priority now is to work with all stakeholders and determine the optimum route forward for the business as we continue to serve customers throughout the UK and Ireland.
“Austin Reed is a well regarded and iconic brand, and therefore we are confident that it is an attractive proposition for a range of potential buyers; as such, we expect, and welcome, contact from interested third parties.”
Simon Cope-Thompson, a partner at Livingstone Partners, backs up this positive view of Austin Reed: “Two iconic British high street brands heading for administration in two consecutive days feels like a hammer blow for the high street as 204 years of combined retailing history face being wiped out.”
“Like BHS, Austin Reed has struggled to keep pace with a fast-paced, highly competitive market increasingly dominated by online retailers. By failing to embrace digital and modernise its stock range, Austin Reed has haemorrhaged market share to more nimbler rivals.
“But all is not lost at Austin Reed — this is a well-known brand with potential for rejuvenation via transformation. The administration may of course result in the emergence of a re-structured/streamlined group owned by Alteri Investors, who only a few days ago bought the equity and shareholder loans from the previous owners, Darius Capital.
“With 1,200 jobs at risk across the UK, and the high street in crisis, all refinancing options must be rapidly considered by Austin Reed’s management and its key stakeholders. Whatever the outcome the hope must be that if the right owner can be found, who is prepared to invest behind the business and support the brand, then maybe Austin Reed can follow in the footsteps of other successful British retailers that have successfully blended online and offline offerings, and save its status as one of Britain’s oldest high street retailers.”
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