The struggling British vogue model LK Bennett has been purchased out of administration by US restructuring specialist Gordon Brothers, elevating the prospect that its remaining 9 UK retailers may shut with the lack of round 380 jobs.
Gordon Brothers, which acquired Poundland for £1 final yr, confirmed it has bought LK Bennett’s international model and mental property belongings for an undisclosed sum after the retailer collapsed for the second time in six years.
The Boston-based agency stated the womenswear label would transfer to an “asset-light” mannequin, fuelling hypothesis that LK Bennett may grow to be an online-only enterprise. The way forward for its bodily property and workforce stays unsure.
Tobias Nanda, head of manufacturers at Gordon Brothers, stated LK Bennett remained a “beloved heritage model” with robust worldwide enchantment.
“We’re excited so as to add LK Bennett to our portfolio and proud to steward the model into its subsequent section of development, bringing its trendy luxurious to each long-time followers and new prospects all over the world,” he stated.
Based within the early Nineties by Linda Bennett with a single retailer in Wimbledon, LK Bennett grew to become recognized for its signature sneakers, purses and occasionwear. At its peak, the model operated greater than 200 shops globally, however has since shrunk to simply 9 standalone UK retailers and 13 concessions.
The enterprise has struggled for greater than a decade following non-public fairness possession. Bennett offered a majority stake to Phoenix Fairness Companions in 2008 for an estimated £80m to £100m, earlier than later returning as a advisor as income collapsed. She purchased the corporate again in 2017 after it posted a £48m loss.
In 2019, LK Bennett entered administration for the primary time and was acquired by Rebecca Feng, its Chinese language franchise associate, resulting in the closure of 15 shops. More moderen accounts revealed the enterprise had recorded a £3.5m loss in 2024 and carried nearly £22m of debt, prompting auditors to warn of “materials uncertainty” over its future.
Nimit Shah, managing director for Europe, the Center East and Africa at Gordon Brothers, stated the agency believed LK Bennett was “able to reinvigoration underneath a brand new asset-light mannequin”, suggesting a pointy pivot away from the standard excessive avenue.
The acquisition comes amid sustained strain on the premium vogue sector, which has struggled with weaker client demand and rising prices. Whereas some rivals, similar to Reiss and Me+Em, have efficiently tailored their supply, LK Bennett has been hampered by what analysts describe as a dated enterprise mannequin and slower response to altering tastes.
The broader UK retail sector has additionally seen a wave of restructurings. Footwear model Russell & Bromley was purchased out of administration by Subsequent earlier this month, a deal that may end result within the closure of most of its shops.
LK Bennett reported revenues of £42.1m within the yr to January 2024, down from £48.8m the earlier yr, swinging from a £2.3m revenue in 2023 to a £3.5m post-tax loss. The corporate employs round 380 folks.
Gordon Brothers’ takeover now leaves workers and prospects ready for readability on whether or not LK Bennett’s bodily presence on the UK excessive avenue will survive its newest rescue.
