Bonmarché joins Watt Brothers in retail plunge
One of Scotland’s oldest retail institutions, the Watt Brothers department store chain, and high street retailer Bonmarché have both gone into administration, putting thousands of jobs at risk.
Administrators from KPMG were appointed at the Glasgow-based Watt Brothers business, which began life in 1915 and operated 11 stores across central Scotland, after it failed to secure new investment in the face of mounting losses.
Although they are exploring whether an early sale of some of the business and assets can be secured, they said they had no option other than to make 229 out of the 306 employees
redundant with immediate effect.
The remaining 77 staff have been kept on to assist with the sell-off of the company’s assets, including stock and property.
And yesterday evening it emerged that Bonmarche has also collapsed into administration, putting almost 2,900 jobs at risk.
The retailer has become the latest victim of the high street downturn after a “sustained period of challenging trading conditions”, administrators said.
The womenswear retailer employs 2,887 staff, including 200 at its head office, and operates 318 stores across the UK.
As well as its flagship store on Sauchiehall Street in Glasgow city centre, Watt Brothers operated a further ten outlets across central Scotland at Ayr, Clarkston, Clydebank, Falkirk, Hamilton, Irvine, Lanark, Livingston, Port Glasgow and Robroyston, along with a warehouse in Glasgow.
The company will continue to trade from the Glasgow store, with a stock clearance event beginning today .
Although sales at the chain had increased year-on-year, peaking at approximately £24 million in 2018, pressure on margins and rising competition from online and new discount retailers saw it fall into the red.
As trading losses continued into 2019, Watt Brothers attempted to secure new investment. However this was unsuccessful and the directors took the decision to appoint administrators.
Blair Nimmo, joint administrator, said: “Despite the director’s tireless efforts to increase margins, cut costs and recapitalise the business, Watt Brothers continued to incur trading losses as a result of the well-publicised challenges being experienced across the retail sector. We are working closely with Skills Development Scotland, via their Pace team, and Jobcentre Plus to support the staff who have been made redundant.”
Tony Wright, Alastair Massey and Phil Pierce, of specialist advisory firm FRP, were appointed as joint administrators for Bonmarche yesterday and said the company will continue to trade with no immediate job losses, as it assesses options to secure the future of the company.
Mr Wright said: “Bonmarche has been a staple on the UK high street for nearly three decades, but the persistent challenges facing retail have taken their toll and led to the administration. There is every sign that we can continue trading while we market Bonmarché for sale and believe that there will be interest to take on the business.”
The administrators added that “all stores remain open and no redundancies have been made”.
The news came as another well-known high street name – Monsoon Accessorize – remains in a critical condition despite securing a restructuring deal. Latest accounts said that management forecasts show targets are set to be missed.