Thu, 12 Nov 2020 | BUSINESS NEWS
Premium womenswear retailer LK Bennett has launched a proposal for a company voluntary arrangement (CVA) as it looks to mitigate the ongoing financial impact of COVID-19. The proposed CVA would see four or five stores close, resulting in a number of job losses, and the company’s remaining stores move to turnover-based rent.
LK Bennett, which employs 400 staff, including 300 in retail roles, has seen its sales significantly impacted by COVID-19. The company says its “biggest strengths”, eventwear and workwear, have been hard to sell during the pandemic, with many events cancelled and a large portion of the workforce working from home.
The company has also been hit by a lack of tourism in London, where it normally makes the majority of its store sales. With stores currently shuttered due to the second lockdown, the company forecasts that, despite its “best efforts”, sales will likely not rebound until mid-2021. As a result, LK Bennett has proposed the CVA, hiring restructuring firm Alvarez & Marshal as its adviser.
A spokesperson for the company said: “LK Bennett is currently negotiating a CVA to mitigate the ongoing financial impact of the COVID-19 pandemic. LK Bennett is one of many retail brands that has faced significant disruption to sales across two lockdown periods in the UK and Ireland.”
“We are committed to doing the right thing; in order to secure as many jobs as possible and continue serving our customers to the best of our ability we are working towards reaching an agreement with our creditors.”
“While we are likely to see four to five store closures and a small number of job losses, any measures we take aim to protect the rest of the jobs in our store portfolio of 69, consisting of standalone stores, concessions and outlets, as well as head office, and to protect the longevity of the business.”
“We understand this is a difficult time for everyone involved. We appreciate the support of our business partners and are doing everything we can to help our team members during this process, including speaking with those affected.”
LK Bennett entered the pandemic in a distressed state. In March 2019, it engaged EY to act as administrator of its UK business.
The UK, Ireland and wholesale business was acquired by Rebecca Feng, head of the company’s Chinese franchises, for £9.8 million in April 2019 through the company Byland UK. However, earlier this year, EY extended the administration process for a further year due to “property matters” and other remaining work in need of completion.
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