The upmarket style retailer LK Bennett is getting ready to collapse for the second time in six years after submitting an software to nominate directors.
Court docket filings present the enterprise submitted papers to the Excessive Court docket on Tuesday, signalling that efforts to safe recent funding or a purchaser might have failed. The transfer places round 280 jobs in danger throughout the group.
Based in 1990 by Linda Bennett, LK Bennett grew to become synonymous with polished British model and constructed a loyal following that included senior politicians and members of the royal household. Nevertheless, the model has struggled to regain monetary stability since its first insolvency in 2019.
In its earlier collapse, LK Bennett fell into administration after failing to safe new funding and was subsequently acquired out of insolvency by its Chinese language franchise associate, Rebecca Feng. That deal adopted a aggressive course of by which she beat rival curiosity from Mike Ashley, founding father of Sports activities Direct.
Regardless of the rescue, the retailer has continued to face mounting strain from rising prices, weak discretionary spending and structural adjustments within the style sector.
The enterprise presently lists simply 9 standalone UK shops, alongside 13 concessions throughout the UK, Eire and Jersey, reflecting a considerably diminished bodily footprint.
In accordance with LK Bennett’s most up-to-date accounts, masking buying and selling as much as the tip of January 2024, the corporate reported losses of £3.2 million and borrowings of just about £22 million.
Auditors Grant Thornton raised a crimson flag over the corporate’s future, warning of a “materials uncertainty associated to going concern”. The accounts disclosed that LK Bennett had breached agreements with its lenders and confronted a deadline to renegotiate its debt services.
Whereas the auditor famous that the corporate had acquired a letter from its financial institution indicating an intention to proceed offering services till a minimum of January 2026, it additionally confirmed that no formal covenant waiver had been secured, leaving the enterprise uncovered.
The destiny of LK Bennett has been intently watched throughout the style trade within the run-up to Christmas, with hopes that seasonal buying and selling would possibly stabilise money move or appeal to a purchaser. The choice to hunt directors suggests these efforts haven’t delivered the turnaround required.
If directors are formally appointed, it would mark one other high-profile casualty on the UK excessive road as style manufacturers proceed to wrestle with subdued client demand, rising rents, wage prices and the shift in the direction of on-line buying.
LK Bennett has been approached for remark.
