High-end fashion chain LK Bennett has called in administrators.
The business, which has 39 shops and about 500 staff in the UK, signalled it was in difficulties last week after lining up EY as administrator if it could not find fresh financing.
The company was founded by Linda Bennett in 1990, and counts the Duchess of Cambridge as a customer.
EY said 55 jobs had already gone at the firm’s headquarters and following the closure of five stores.
The stores which have shut are Sheffield in the Meadowhall shopping centre, Bristol, Liverpool and two in London at Brent Cross and Westbourne Grove.
The brand also trades out of 37 concessions in stores around the country.
Earlier today, its website had put up a notice indicating it had stopped taking orders. Callers to its customer service line are told that the offices are closed.
Joint administrator Dan Hurd said that amid “tough trading conditions” for retailers, LK Bennett had been “further impacted by significant rent increases and business rate rises”.
He added: “Linda and the management team therefore made the difficult decision to place the company into administration, to protect the future of the business.”
The business had been put up for sale and the administrators hoped it would be “attractive to prospective buyers”.
Meanwhile, trading at the shops will continue as normal, although web sales will be temporarily suspended, to allow the administrators to work with the company so that customer orders can be processed and delivered as usual.
‘Difficult and unstable’
Last week, Ms Bennett emailed staff saying she had “fought as hard as I can, with all your help, to turn the business into the success that I know it deserves to be”.
“These are difficult and unstable times, and we are doing everything we can to identify the best way forward,” she had said.
Ms Bennett sold her majority stake in the chain to private equity firm Phoenix Equity Partners in 2008, but in 2017 returned to advise the business after the retailer started to struggle. She bought the company back a short time later.
The chain reported an operating loss of nearly £6m in the year to the end of July 2017, the most recent results available for the firm.
The accounts show that on her return, Ms Bennett invested about £11.2m into the business.
EY said the company’s international operations were not included in the administration process.
What went wrong?
When she founded the chain, Ms Bennett – who was awarded an OBE in 2006 – said her aim was to bring “a bit of Bond Street luxury to the High Street”.
The chain, which opened its first store in Wimbledon Village in south-west London, became famed for its kitten-heel shoes.
Maureen Hinton, global research director GlobalData, said LK Bennett had “become expensive and it wasn’t as compelling as distinctive as it had been originally. Therefore you’re not going to get the turnover or volume of sales that you need to keep business going.
“It’s a tough one because it’s people’s disposable income, they are being careful what they spend it on, especially when it’s expensive and it’s lost some of its cachet as a compelling brand.
“It’s probably in quite expensive places as well, with business rates going up,” she added.
“I think it might be taken into a group that might be able to consolidate all the back office… costs as well.”