Another blow for high street retail with failure of fashion chain Coast
FASHION chain Coast, which has six outlets in Northern Ireland, has gone into administration in the latest blow for the high street.
The occasion wear brand has one stand-alone store in Victoria Square, four concessions at Debenhams department stores across the region and a fifth concession in House of Fraser Belfast.
The collapse on Thursday evening saw the immediate closure of all 24 stand-alone stores in the UK.
However, fashion company Karen Millen has bought over parts of the brand, meaning Coast department store concessions and its website will continue to operate.
Around 600 staff will transfer to Karen Millen leaving around 300 jobs still at risk. Eight employees from the Victoria Square store are currently affected by the unexpected closure.
It is believed that Coast had been hit hard by the collapse of House of Fraser, which went into administration owing millions to retailers with concessions in the department store.
PwC has been appointed administrators. Mike Denny, joint administrator and PwC director, said: “The businesses had been facing financial difficulties due to structural challenges in the retail space and specifically the concession partner market, as well as a softening of demand for occasion wear.
“This sale puts the ongoing business on a firmer financial footing. Karen Millen will be working with the existing management team to continue to develop the new business.
“Regrettably, other parts of the business including 24 retail stores were not included in the transaction. We will make every effort to help those employees in parts of the business that were not included in the sale.”
Meanwhile, the chairman of Patisserie Valerie has said he will put money into the business after it was faced with collapse after an accountancy scandal.
The company has two stores in Belfast’s city centre at Donegall Square West and Castle Lane, and another at Forestside Shopping Centre in the south of the city.
Chairman and main shareholder Luke Johnson has agreed to loan the company up to £20 million in an effort to keep it afloat.
The high-end cake chain, which has a net debt of approximately £9.8m, suspended chief finance director Christopher Marsh after the discovery of a major black hole in its books.
Marsh was arrested on suspicion of fraud by false representation and has since been released on bail as a probe is led by the Serious Fraud Office.
The chain will also aim to raise £15m by issuing new shares. The proceeds from the share placement will be used to repay £1.14m owed to HMRC and undisclosed amounts to other trade creditors.
Patisserie Holdings said: “The company expects to enter into a new £10m loan agreement with Luke Johnson later today, the company’s executive chairman.
“The loan is for a three-year term and made on an interest-free/fee-free basis and will be secured in due course.
“Due to the nature of the settlement period of the placing, Luke Johnson will commit a further bridging loan facility of up to £10m, to provide the company with the ability to fund immediate outstanding liabilities.”