An­other blow for high street re­tail with fail­ure of fash­ion chain Coast

Belfast Telegraph - - NEWS - BY CHRIS­TINE CARRIGAN

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.”

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