Britain’s high street suffered its second casualty of the week on Tuesday when upmarket suit retailer Austin Reed fell into administration, putting more than 1,000 jobs at risk.
AlixPartners, an advisory consultancy, has been appointed as administrator to the retailer, which will continue trading out of its roughly 150 stores while its future hangs in the balance. The administrator said it had already received 20 expressions of interest to buy the “well-regarded and iconic brand”, including from rival retailers and private equity firms.
“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,” said Peter Saville, joint administrator at AlixPartners.
“We are confident that it is an attractive proposition for a range of potential buyers,” he added.
Austin Reed, whose suits were once worn by celebrities and dignitaries from Winston Churchill and The Beatles to Christine Lagarde, has struggled to reverse languishing sales despite efforts to reinvent itself and make a push online.
Turnover has fallen each year since 2011 and, according to its most recent accounts, fell 7.8 per cent in the year to January 2015. In February of the same year it carried out a compulsory voluntary arrangement when it offloaded 31 stores, reduced its debt and pledged to “achieve a structure more appropriate in the new digital age”.
Last week one of its creditors, Alteri Investors, which specialises in distressed retailers, bought out the brand in a move that its chief executive said was to “protect our position as secondary lenders” to the company.
But on Friday it filed notice of its intention to appoint administrators and is now seeking to sell the business, which includes the Country Casuals and Viyella womenswear brands.
The fall of Austin Reed follows that of high-street stalwart BHS, which went into administration on Monday.
According to Richard Hyman, an independent analyst, Austin Reed will struggle to complete a sale because potential retail buyers are already burdened with excess capacity and battling fierce competition.
He added that as shoppers move online retail premises would need to be sold and reconfigured as leisure spaces or residential property.
“The days of doing some sharp property deal — a deal where you can strip assets — are virtually gone because most retailers have far too much capacity and their balance sheets are vulnerable from overvalued assets,” he said. “Over the next ‘X [number of]’ years [retailers] will go into processes like this and then they’ll disappear because they’re no longer relevant.”